By Joe Pan<\/p>\n\n\n\n
Photo from Hong Kong Legco Website<\/p>\n\n\n\n
HONG KONG \u2014 Hong Kong\u2019s Legislative Council (Legco) on May 21 passed the landmark Stablecoin Bill at its second reading, marking a pivotal step in the city\u2019s ambition to become a global hub for digital assets and financial innovation.<\/p>\n\n\n\n
The bill, officially published in the Gazette on December 6, 2024, and introduced for its first reading on December 18, 2024, establishes a comprehensive licensing and regulatory framework for stablecoin issuers. It aims to foster financial stability, enhance investor protection, and ensure Hong Kong\u2019s competitiveness as an international financial center.<\/p>\n\n\n\n
Bill Committee\u2019s Fast-Track Approach<\/strong><\/p>\n\n\n\n Duncan Chiu, Legco member and chairman of the bill committee that shepherded the legislation through a panel of 15 members, highlighted the bill\u2019s swift progress. \u201cI think the most interesting part is, when we were having the debate and discussions at the panel, the U.S. was actually also progressing with their own \u2018Genius Bill\u2019 on stablecoin legislation. We followed closely what the U.S. was discussing. That\u2019s why we had the bill committee meetings, so we did wrap up very fast in terms of such a comprehensive bill,\u201d Chiu said.<\/p>\n\n\n\n The bill saw minimal revision between its first and second readings, following a consultation period that began in December 2024 and concluded in early March 2025. Lawmakers and regulators worked closely with industry stakeholders to ensure the legislation was both comprehensive and practical, aligning with international standards while addressing local market needs.<\/p>\n\n\n\n With the Stablecoin Bill expected to come into force later this year, industry participants now have a clear regulatory roadmap. The HKMA will conduct further consultations on detailed requirements, and transitional arrangements will help existing and aspiring issuers adapt to the new regime.<\/p>\n\n\n\n \u201cThis is an important bill\u2014we have a few more bills coming, bills that will address things like VA Custodian and VAOTC (Virtual Asset Custodian and Virtual Asset Over-the-Counter services),\u201d Chiu further explains, after receiving congratulations from industry watchers.<\/p>\n\n\n\n Secretary for Financial Services and the Treasury Christopher Hui welcomed the passage, saying, \u201cThe Ordinance adheres to the \u2018same activity, same risks, same regulation\u2019 principle, with a focus on a risk-based approach to promote a robust regulatory environment. This is not only in line with international regulatory requirements, but also lays a solid foundation for Hong Kong\u2019s virtual asset market, which, in turn, promotes the sustainable development of the industry, protects users\u2019 rights and interests, and strengthens Hong Kong\u2019s status as an international financial centre.\u201d<\/p>\n\n\n\n Chief Executive of the Hong Kong Monetary Authority (HKMA) Eddie Yue echoed the sentiment, noting, \u201cThe Ordinance has established a risk-based, pragmatic, and flexible regulatory regime. We believe that a robust and fit-for-purpose regulatory environment would provide favourable conditions to support the healthy, responsible, and sustainable development of Hong Kong\u2019s stablecoin and the broader digital asset ecosystem.\u201d<\/p>\n\n\n\n What the Stablecoin Bill Allows Potential Issuers<\/strong><\/p>\n\n\n\n The new law introduces a clear pathway for stablecoin issuers and related service providers. Here\u2019s what the bill enables:<\/p>\n\n\n\n Key Provisions for Stablecoin Issuers:<\/strong><\/p>\n\n\n\n![\"\"](\"https:\/\/blockwind.io\/hk-en\/wp-content\/uploads\/2026\/09\/image-16.png\")
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