Hong Kong Enters Global Competition with New Stablecoin Licensing Legislation

Hong Kong has passed a stablecoin bill that will enable the region to establish a licensing regime for fiat-backed stablecoin issuers. “Hong Kong’s stablecoins are backed by fiat currency as underlying assets, and we welcome global enterprises and institutions interested in issuing stablecoins to apply in Hong Kong,” legislative council member Johnny Ng stated on X on Wednesday. Institutions are expected to be able to apply for a license from the Hong Kong Monetary Authority by the end of the year.

Hong Kong has been working on establishing a stablecoin regime since 2023, having published a consultation paper on stablecoin guidelines towards the end of that year. This was followed by the introduction of the Stablecoin Bill, which the Legislative Council of the Hong Kong Special Administrative Region passed in its third reading, according to Ng’s post.

The region aims to keep pace with countries globally that have been implementing their own stablecoin frameworks. The European Union began licensing stablecoin issuers last year after enacting its comprehensive crypto legislation, known as the Markets in Crypto Assets regulation (MiCa). Meanwhile, the U.S. is currently advancing a stablecoin bill through Congress, and the U.K. is gathering feedback on draft legislation that will impact stablecoins as well.

The stablecoin sector has emerged as a significant trend in recent years, with both crypto and traditional finance firms increasing their engagement in the industry. Ben Reynolds, BitGo’s managing director of stablecoins, remarked at Consensus 2025 that major banks are increasingly recognizing the importance of the sector, partly due to concerns about losing market share to digital currencies.