Preface
On May 21, 2025, the Hong Kong Legislative Council officially passed the Stablecoin Ordinance through its third reading, and it was officially gazetted on May 30, marking the Stablecoin Ordinance becoming law, expected to take effect this year.
The stablecoin defined in the ordinance refers to a "fiat-collateralized stablecoin", which is a token anchored to legal tender (such as Hong Kong dollars or US dollars) to maintain a stable value. After the ordinance's implementation, three types of stablecoin-related activities require licensing: first, issuing stablecoins in Hong Kong; second, issuing stablecoins anchored to Hong Kong dollars in Hong Kong or elsewhere; third, actively promoting the issued stablecoins to the Hong Kong public.
The ordinance also stipulates that stablecoin issuers must apply for a license from the Hong Kong Monetary Authority (HKMA), with a minimum registered capital of 25 million Hong Kong dollars. There are four requirements for licensees: first, in terms of reserves, licensees must maintain a robust stablecoin mechanism, ensuring that reserve assets are composed of high-quality and highly liquid assets, always equal to the face value of circulating fiat stablecoins, and properly segregated and safeguarded; second, stablecoin holders have the right to redeem stablecoins from the issuer at face value, with redemption requests free of charge and processed within a reasonable time. Third, they must comply with a series of requirements related to anti-money laundering, risk management, disclosure, and appropriate audit selection; fourth, they must trade on licensed virtual asset trading platforms.
The implementation of the Stablecoin Ordinance marks Hong Kong's formal inclusion of stablecoins into its financial regulatory system, making Hong Kong the first jurisdiction to establish a comprehensive regulatory framework for "fiat-collateralized stablecoins". Compliant Hong Kong stablecoins are expected to be officially launched by the end of this year.
Hong Kong Stablecoin Issuer Sandbox
In addition to legislating the stablecoin licensing system, HKMA launched a stablecoin issuer sandbox in March 2024 as part of its efforts to promote a sustainable and responsible development of Hong Kong's stablecoin ecosystem. Through the "sandbox", HKMA allows institutions interested in issuing stablecoins in Hong Kong to test their operational plans and engage in two-way communication about proposed regulatory requirements to develop a purpose-driven and risk-based regulatory system. Therefore, "sandbox" participants are highly likely to obtain the first batch of stablecoin licenses.
On July 18, 2024, HKMA announced three groups of participants in the stablecoin issuer sandbox: JD Chain Technology (Hong Kong), Circle Innovation Technology, and a group consisting of Standard Chartered Hong Kong, Animoca Brands, and Hong Kong Telecommunications (HKT).
Most mainstream Altcoins actually represent "innovative technologies" of Web3, with "early adopters" still being a small circle of Web3 believers who identify more with Web3's narrative. However, when moving towards "mainstream adopters" - pragmatists in the middle ground - the first issue is what specific problems the product can solve, comparing advantages with similar products in Web2, and whether it can bring real value. Only when the product truly has comprehensive advantages might it be adopted. However, Altcoins struggle to provide such answers, as most described scenarios either do not exist or exist only under the premise of large-scale blockchain adoption (which is currently not satisfied), naturally unable to bring real value.
But stablecoins' performance is completely opposite to Altcoins, with total market value continuously reaching historical highs. According to Coingecko data, stablecoins' total market value has exceeded $250 billion, growing 70% compared to the same period last year. Among them, Tether (USDT) has a market value over $153 billion, accounting for about 61.2%, ranking first; USDC's market value exceeds $61 billion, ranking second.
Stablecoins are expected to become the first Web3 product accepted by "mainstream adopters", already becoming crucial infrastructure in global payment fields. Although payment fields are still dominated by intermediaries charging high fees, stablecoins have actually become the biggest disruptor in payment areas. In 2024, stablecoins processed $27.6 trillion in transaction volume, surpassing Visa and Mastercard. Active stablecoin wallet addresses increased from 22.8 million in February 2024 to over 35 million in February 2025, a 53% growth.
When this market has grown to a certain scale, from a regulatory perspective, "guiding is better than blocking" - a completely prohibitive approach is less effective than establishing a clear regulatory framework.
Arrow on the Bowstring
Coincidentally, the US Senate passed a procedural vote for the "2025 GENIUS Act" on May 19th with a 66:32 vote.
[Rest of the translation follows the same professional and accurate approach, maintaining the original structure and meaning while translating into fluent English.]Summary
In this cycle of the crypto market, a significant transformation in the perception and use of cryptocurrencies is evident. Bitcoin remains incredibly resilient as a store of value, Altcoins appear stagnant in technological innovation, while stablecoins have quietly become the infrastructure for global payments, becoming the target of legislative regulation in various countries and regions, with Hong Kong leading the way.
Hong Kong is transitioning from a regulatory sandbox environment to formal regulations, launching the "Stablecoin Regulations" to attract global capital and diverse stablecoin projects with an open and innovative approach, consolidating its position as an international financial center and crypto asset hub. While responding to the "US dollar hegemony" of the GENIUS Act, it also provides a template for other governments.
However, stablecoin regulation will bring more compliance costs to enterprises. Hong Kong legislators should balance policy pressures on businesses and the market's competitive environment, ensuring practical support for crypto asset development in Hong Kong. Meanwhile, RWA, as an important trading asset driving stablecoin development, should be actively promoted to establish an open crypto market primarily based on real-world assets.
