Hong Kong to begin licensing stablecoins on August 1

• Hong Kong regulates stablecoins with a focus on security
• New policy requires full backing in liquid assets
• Initiative drives tokenization of real assets (RWA)

From August 1st, Hong Kong's new stablecoin licensing regime comes into effect, as per announced by Christopher Hui, Secretary of Financial Services and Treasury. The move is part of the city’s expanded agenda to establish itself as a global hub for digital assets.

Hong Kong activates stablecoin licensing on August 1 in major digital asset push

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During the Hong Kong Digital Finance Awards, Hui highlighted The goal is to foster a robust and innovative ecosystem of virtual assets, without compromising security and financial integrity. The regulation of stablecoins will be conducted by the Hong Kong Monetary Authority (HKMA) and requires issuers of these assets, when referenced in fiat currencies, to obtain an official license.

One of the central requirements is that stablecoins must be fully backed by reserves in high-quality liquid assets. This requirement aims to ensure stability and investor protection, preventing systemic risks in the cryptocurrency sector.

This new framework is part of the so-called “Policy Statement 2.0”, an update to the strategy originally presented in October 2022. The plan includes the LEAP framework, aimed at legal simplification, expansion of tokenized products, development of use cases and strategic partnerships in the blockchain sector.

The regulation of stablecoins is directly linked to the advance in the tokenization of real-world assets (RWA), such as government bonds and precious metals. According to official sources, legal revisions are underway to speed up the issuance of these assets and make the process more efficient. In addition, new rules on the tax treatment of tokenized ETFs and potential incentives on blockchain profits are also in development.

Big names in the industry, such as Ant Group, have already expressed interest in participating in this new market, signaling that they intend to apply for a license once the regime comes into effect. Authorities hope that regulatory clarity will stimulate adoption and position Hong Kong as an international benchmark for digital assets and stablecoins.