Hong Kong's first batch of compliant stablecoins will debut in the second half of the year! Financial Services and the Treasury Bureau: This year, the "Comprehensive Regulation of Virtual Assets Bill" will be submitted to prevent bank capital outflows.

As Hong Kong's first batch of regulated stablecoins is expected to officially launch between mid-year and the second half of this year, the Hong Kong government is tightening its regulatory grip. Secretary for Financial Services and the Treasury Christopher Hui today (24th) provided a detailed response in the Legislative Council regarding stablecoin management, not only alleviating concerns about the impact of stablecoins on the traditional banking system but also making a major announcement that the government and the Securities and Futures Commission (SFC) will submit a new comprehensive virtual assets regulatory bill within this year. In response to unlicensed stablecoins in the market, the Hong Kong Monetary Authority (HKMA) and law enforcement agencies have initiated a strict crackdown.

(Previous summary: Hong Kong stablecoin licenses land, only HSBC + Standard Chartered Bank hold licenses after a melee of 36 giants)

(Background supplement: OSL Group actively cooperates with Hong Kong stablecoin licensed issuers to build a compliant digital asset ecosystem)

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• Preventing Financial Disintermediation, Reserves Must Be Held in Hong Kong Banks
• Summary of Three Core Responses to Legislative Council Inquiry
• Major Announcement: New "Comprehensive Virtual Assets Regulatory Bill" to Be Introduced This Year

On its path to becoming a global Web3 hub, Hong Kong is entering the deep-water zone of regulatory implementation. Since the "Stablecoin Ordinance" took effect in August 2025 and the Hong Kong Monetary Authority (HKMA) issued issuer licenses to two banking-background institutions in April this year, the first batch of compliant stablecoins will soon be launched in the second half of the year.

Today (24th), Secretary for Financial Services and the Treasury Christopher Hui delivered a comprehensive and firm policy statement in the Legislative Council in response to Professor Ngai Chi-ho's oral inquiry on "Stablecoin Management."

Preventing Financial Disintermediation, Reserves Must Be Held in Hong Kong Banks

Addressing market concerns that the widespread adoption of licensed stablecoins could lead to a massive outflow of funds from the traditional banking system (i.e., the "financial disintermediation" risk), thereby affecting loan amounts and liquidity ratios, Christopher Hui offered reassurance. He emphasized that the HKMA had fully assessed this risk when designing the system and established strict firewalls.

According to regulations, licensed issuers must hold qualified "reserve assets," such as bank deposits and high-quality, highly liquid debt instruments, and these assets must be held in Hong Kong banks. This not only ensures the 1:1 redeemability of stablecoins but also effectively locks funds within the local financial system. The HKMA is also actively cooperating with organizations such as the Bank for International Settlements to ensure Hong Kong's regulations align with international standards.

Summary of Three Core Responses to Legislative Council Inquiry

| Policy Aspect | | --- | Government and HKMA Specific Measures | | --- | --- | | Preventing Banking System Risks | Mandates stablecoin issuers to hold highly liquid reserve assets in local banks; HKMA will conduct ongoing supervision and may impose additional regulatory requirements when necessary. | | Cross-Border Payments and Digital Yuan | Currently conducting pilot tests on central bank digital currencies (including digital yuan) and tokenized deposit networks. Two licensed issuers have already participated in the tests, exploring settlement synergies with Belt and Road physical trade. | | Crackdown on Unlicensed Stablecoins and Public Education | Warning letters have been sent to entities operating without licenses in the market, with serious cases referred to the police. Stablecoins are defined as "blockchain payment tools" rather than speculative assets; the public is not protected when purchasing unlicensed stablecoins. |

Major Announcement: New "Comprehensive Virtual Assets Regulatory Bill" to Be Introduced This Year

In terms of enforcement and cracking down on illegal marketing, Christopher Hui reiterated that the "Stablecoin Ordinance" strictly stipulates that only regulated entities can "offer" stablecoins to the public. Since the ordinance took effect, the HKMA has proactively sent warning letters to entities suspected of operating without a license. Meanwhile, when the Securities and Futures Commission (SFC) discovers marketing of unregulated stablecoins actively targeting the Hong Kong public, it will initiate cross-departmental crackdowns through intelligence-sharing mechanisms, with serious cases directly referred to the police or the Department of Justice.

Notably, Christopher Hui made a significant legislative announcement during the meeting: The government and the SFC will submit a new bill to the Legislative Council within this year (2026). This bill aims to establish a comprehensive regulatory system covering "virtual asset trading, custody, advisory, and management services." This means Hong Kong will formally move from a single exchange license and stablecoin issuance license to a new era of comprehensive regulation over the entire Web3 industry chain.

Finally, the government reiterated its call for the public to regard stablecoins as "payment tools" on the blockchain and not to blindly follow trends by using them as speculative targets. In the future, the HKMA website will continue to update the list of licensed entities for public reference.