Hong Kong has adopted a milestone law to regulate Stablecoins supported by Fiat, which indicates his continuous urge to position itself as a global hub for digital finances.
On May 21, the legislator of Hong Kong Johnny NG confirmed that the legislative council approved the bill after the third reading. The new law is expected to take effect before the end of 2025.
License regime
The new framework is introducing a license regime for Stablecoin -Emitents via the Hong Kong Monetary Authority (HKMA). It offers a transitional period for companies to adapt, to request licenses and to meet legal expectations.
As soon as the rules are in force, only licensed entities may publish Fiat-Referred Stablecoins in or linked to the Hong Kong Dollar, regardless of their geographical location.
The relocation tries to teach trust, transparency and strong compliance standards in the growing virtual ecosystem of the city.
He said:
“The Stablecoins of Hong Kong are supported by Fiat -Vuuruta as underlying assets, and we welcome global companies and institutions interested in publishing Stablecoins to apply in Hong Kong.”
In the meantime, NG emphasized that the bill is a starting point for a wider Web3 development in the region. He stated that the government intends to work closely with players in the private sector to design usage scenarios and to promote the adoption of Stablecoin.
Stablecoin Bill from Hong Kong
The Hong Kong government said the new framework requires that every entity issued a Fiat-Referred Stablecoin (FRS) to the Hong Kong Dollar to meet strict operational standards.
These include clear segregation of assets, repayment at nominal value and a reliable mechanism for maintaining price stability.
They must also meet anti-money laundering laws, risk management protocols, disclosure obligations and independent audit requirements. Moreover, only licensed companies can promote or advertise these products for the public.
Christopher Hui, secretary for financial services and the Treasury, said that the law assumes a risk -based regulatory model that is in line with worldwide standards.
He added that this approach will help in creating a safer user environment, promoting the growth of industry in the long term and reinforcing the reputation of Hong Kong as a leading international financial hub.