Hong Kong to ban stablecoin promotions without a licence
Only firms licensed by the HKMA may promote fiat-referenced stablecoins under the city’s new rules set to take effect next week.
Hong Kong will ban the public marketing of unlicensed fiat-referenced stablecoins starting 1 August, as the city moves to implement a long-anticipated regulatory framework. Authorities aim to curb market hype and protect retail investors from potential fraud.
HKMA chief Eddie Yue issued a warning urging caution amid what he described as ‘frothy’ market conditions.
More than 40 companies have approached Hong Kong regulators about stablecoin licensing, though many lack detailed plans or technical readiness. The upcoming law only allows licensed entities to promote stablecoins to retail users, with unlicensed offerings limited to professional investors.
Major firms including Ant Group, JD.com, Circle and Standard Chartered are reportedly preparing applications.
The new law introduces strict requirements around licensing, reserve backing, and custody. Stablecoins must be fully backed by liquid, same-currency assets like cash, government bonds or deposits, and these reserves must be held in trust.
Early licence approvals are expected later in the year, but Yue warned that many applicants may not meet the bar.
Hong Kong’s move aligns with global momentum toward stablecoin regulation. The Bank for International Settlements recently flagged risks tied to cross-border usage, while the US has already passed stablecoin legislation.
The HKMA is expected to finalise its anti-money laundering and supervisory rules by end of July, followed by detailed application guidance next week.
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