Interpretation of New Regulations on Hong Kong Stablecoins: Opportunities and Challenges

On August 1, 2025, Hong Kong's "Stablecoin Regulation" officially came into effect, becoming the world's first comprehensive regulatory framework for fiat stablecoins. This move not only marks Hong Kong's foresight in the digital finance sector but also sets a new standard for the global stablecoin market. This article will delve into the core points of this policy, explore its impact on retail investors, and compare the differences in stablecoin regulation among Hong Kong, Singapore, and the United States.

Core Elements of Hong Kong's Stablecoin Regulatory Framework

The Hong Kong Monetary Authority (HKMA) has established a strict licensing regime through the "Stablecoin Ordinance." This regime requires institutions issuing fiat stablecoins or claiming to be pegged to the value of the Hong Kong dollar to apply for a license from the Monetary Authority. Applicants must meet a series of stringent conditions, including a robust risk management framework, anti-money laundering (AML) and counter-terrorism financing (CFT) measures, as well as strong technical security capabilities.

The Monetary Authority also launched the "stablecoin sandbox" program to support testing for cross-border trade and Web3 applications. Issuers must ensure that reserve assets are sufficient and kept in regulated custodial institutions while regularly publishing audit reports. These measures aim to balance innovation with risk, enhancing market transparency and security.

Compliance Guide for Retail Investors

Under the new regulations, retail investors need to take the following steps to hold stablecoins in compliance:

1. Choose stablecoin products authorized by the Monetary Authority, and you can check the list of issuers through official channels or compliant exchanges.

2. Use a virtual asset trading platform (VASP) regulated by the Monetary Authority to conduct transactions, ensuring that the platform complies with KYC and AML requirements.

3. Understand the specific uses of the stablecoin you hold (such as cross-border payments) and the issuer's reserve audit reports to ensure value stability.

4. Pay attention to the technical and compliance challenges that may arise from differences in cross-chain technology or cross-border regulations.

Investors should be cautious of non-compliant stablecoins that promise "high returns" and prioritize issuers with high transparency and regulation.

Global Stablecoin Regulatory Comparison

Hong Kong: comprehensive and strict

Hong Kong's regulatory framework is comprehensive and stringent, emphasizing reserve transparency and AML compliance. It supports multi-currency stablecoins, positioning itself to promote the internationalization of the Renminbi and cross-border trade. This policy has attracted numerous banks and tech giants to apply for licenses, and it is expected to drive Hong Kong to become the digital financial center of Asia.

Singapore: Flexible Prudence

The Monetary Authority of Singapore (MAS) launched a stablecoin framework in 2023, focusing on the regulation of stablecoins pegged to the Singapore Dollar. The policy is relatively flexible, attracting several well-known issuing institutions from around the world. Through the "Project Orchid" initiative, Singapore is actively testing payment and DeFi applications, with high participation from retail investors.

USA: The market is mature but regulation is fragmented.

The United States has yet to introduce a unified stablecoin legislation, but significant progress is expected by 2025. Currently, agencies such as the SEC and CFTC require issuers to register as money service businesses (MSB) and disclose the status of reserve assets. The U.S. stablecoin market is the largest, but conflicts between state and federal regulations have increased uncertainty.

Investment Opportunities and Challenges

opportunity

• The compliant stablecoin in Hong Kong provides retail investors with a safe investment option.
• The global stablecoin market is growing rapidly, and Hong Kong may see a market expansion similar to that of the United States.
• Multi-chain technology is expected to reduce transaction costs and improve efficiency.

challenge

• The high threshold in Hong Kong may limit the number of issuers, resulting in limited choices for retail investors.
• Cross-border regulatory differences have increased the complexity of compliance.
• Technical vulnerabilities or poor reserve management may cause value fluctuations.

Conclusion and Action Recommendations

The Hong Kong "Stablecoin Regulation" creates a safe and standardized environment for retail investors, but also requires a higher level of compliance awareness. Investors should choose stablecoins authorized by the Monetary Authority, trade through regulated platforms, and closely monitor usage and reserve transparency.

In the short term, pay attention to the list of the first batch of licensed issuers and choose compliant stablecoin products. In the medium term, consider participating in cross-border trade or Web3 scenario applications. In the long term, continue to monitor regulatory developments in places like Hong Kong, Singapore, and the United States, and optimize your investment portfolio.

Hong Kong's regulatory framework focuses on financial stability and the internationalization of the renminbi, making it suitable for conservative investors. In contrast, Singapore offers a more flexible environment, while the United States has the most mature market. Investors should make informed choices among these markets based on their own risk preferences and investment goals.