Key Takeaways
- Hong Kong’s LegCo passed a bill that aims to facilitate the creation and issuing of stablecoins in the city-state.
- The move will open up new possibilities for the cross-border use of the digital Yuan, also known as e-CNY, and become a point of reference for the adoption of stablecoins in other parts of the country.
- Hong Kong has gone ahead of the United States, where a similar bill is still undergoing the legislative process.
Hong Kong’s Legislative Council (LegCo) has finally passed the long-awaited Stablecoin Regulation Bill, which aims to introduce a robust regulatory framework for the issuance of fiat-pegged stablecoins in the city-state.
The passage of the world’s first dedicated Stablecoin regulation on fiat-pegged stablecoins marks a significant milestone in the city-state’s push to solidify its position as a global financial hub that leads the way in cryptocurrency regulation.
Cross-Border Use of the Digital Yuan
The bill was gazetted as the Stablecoins Ordinance (Cap. 656) (Ordinance) came into effect on May 30, 2025; however, the Ordinance has yet to take effect, and its commencement date remains unknown. However, according to the Hong Kong Monetary Authority (HKMA), the regime is expected to take effect later this year.
Another expert noted that the move to pass the Stablecoin regulation underscores China’s broad strategic ambition to strengthen its financial position in the emerging digital age. The expert further stated that as the legislation takes effect, it will open up new possibilities for the cross-border use of the digital Yuan, also known as e-CNY, in addition to serving as a point of reference for further adoption of stablecoins in other parts of the country. Commenting on the development, Song Ke, executive vice president of Renmin University of China’s Shenzhen Research Institute, said:
“Hong Kong’s Stablecoins Ordinance marks the world’s first official legislation targeting stablecoins, setting a policy benchmark globally.”
Introduce Regulatory Clarity
According to Song, the Stablecoin regulation bill will also provide a clear regulatory framework for the creation of the Hong Kong Stablecoin market and introduce regulatory clarity for investors and institutions in addition to paving the way for innovation in the regional stablecoin ecosystem. Under the newly passed law, anyone intending to issue a fiat-backed stablecoin in Hong Kong must now obtain a regulatory license whether the digital asset is meant to be used within or out of the city. Song added:
“By enabling conversion into stablecoins pegged to the Hong Kong dollar, the e-CNY could be integrated into the broader stablecoin ecosystem, expanding its role in cross-border settlements.”
Attract Global Stablecoin Issuers
Yuan Shuai, deputy secretary-general of Z-Park Internet of Things Industry Alliance, said the Hong Kong Stablecoin regulation bill was of great significance for the global financial hub amid intensifying global competition over stablecoin leadership. Yuan added:
“It provides institutional support for Hong Kong to attract global stablecoin issuers and related enterprises, further consolidating Hong Kong’s position as an international financial hub and enhancing its voice and competitiveness in the global virtual asset market.”
Conclusion
The passing of Hong Kong’s Stablecoin regulation bill comes at a time when Stablecoins are drawing global regulatory attention. On May 19, the United States Senate advanced its bill to regulate stablecoins, called the GENIUS Act. Once Hong Kong’s new law comes into effect, some of its key application scenarios will include cross-border payments, securities settlement, and decentralized finance blockchain-based financial services operating without traditional intermediaries, such as banks.
Frequently Asked Questions
What cryptos are approved in Hong Kong?
Currently, only four cryptocurrencies—Bitcoin, Ether, Avalanche, and Chainlink—are legally available for trade in Hong Kong, highlighting the city’s cautious but forward-looking stance on crypto regulation.
Is it illegal to buy crypto in Hong Kong?
Under Hong Kong law, cryptocurrencies are not considered legal tender and do not qualify as a form of money. No ordinance directly regulates these classes of products.
What is a stablecoin?
Stablecoins are cryptocurrencies with values tied to fiat currencies or other assets. They are often said to be “pegged to” a single or a basket of fiat currencies and/or other assets.