On August 1, 2025, Hong Kong's virtual asset regulation will reach an important milestone—the "Stablecoin Regulation" will officially take effect. This initiative not only marks Hong Kong's deep layout in the digital finance sector but also establishes a strict and prudent regulatory model for stablecoins globally. On the eve of the regulation's implementation, the Hong Kong Monetary Authority (HKMA) announced a six-month transitional arrangement and issued a warning against excessive market speculation. This article will delve into the details of Hong Kong's "Stablecoin Regulation," the HKMA's cautious attitude, market dynamics, and future outlook.
On July 29, the Hong Kong Monetary Authority released several important guidelines and explanatory documents to pave the way for the upcoming regulatory framework for stablecoin issuers, effective August 1. The core documents include the consultation summary of the "Guidelines for Regulating Licensed Stablecoin Issuers," the consultation summary of the "Guidelines for Combating Money Laundering and Terrorist Financing (Applicable to Licensed Stablecoin Issuers)," and summaries of two sets of licensing documents. The release of these documents signifies that Hong Kong's stablecoin market will officially enter an era governed by laws and regulations.
To ensure a smooth market transition, the HKMA has established a six-month transitional arrangement aimed at properly handling institutions that have previously engaged in stablecoin issuance in Hong Kong:
Temporary License: For issuers capable of meeting regulatory requirements in the short term, the HKMA will consider issuing temporary licenses, providing ample time to complete the formal licensing application process.
Orderly Business Cessation: If an issuer fails to meet the relevant requirements within three months after the regulation takes effect, they must orderly cease operations in Hong Kong within four months of the law's enactment. If the HKMA believes that an issuer cannot meet the licensing standards and regulatory requirements, the issuer must orderly cease operations in Hong Kong within one month of receiving a rejection notice.
This transitional arrangement fully reflects the balance that Hong Kong's regulatory authorities seek to achieve between promoting innovation and preventing risks, providing market participants with adaptation time while clarifying the exit mechanism for non-compliant behavior.
The HKMA encourages institutions intending to apply for a license to contact the HKMA via official email by August 31, 2025, for preliminary communication and feedback. For those well-prepared and wishing to be considered early, formal applications should be submitted by September 30, 2025.
However, HKMA President Eddie Yue's remarks poured "cold water" on the market, emphasizing a cautious licensing attitude. He pointed out that there has been excessive excitement in the market regarding the concept of stablecoins, with some listed companies seeing their stock prices rise simply by claiming involvement in stablecoin business, regardless of their main business relevance. Yue clearly stated that in the initial phase, the HKMA would at most issue "a few" stablecoin licenses, meaning that the vast majority of applicants would face disappointment. He reminded investors that even if a license is obtained, the contribution to short-term profitability is uncertain due to initial resource investment and steady development considerations, urging investors to remain calm and think independently.
The HKMA's "better to have fewer than to have many" strategy aims to ensure that stablecoin issuers possess genuine strength and compliance capabilities, rather than merely being tools for capital market speculation. This cautious attitude is crucial for the long-term healthy development of Hong Kong's stablecoin market.
CITIC Securities released a research report on July 30, providing an in-depth interpretation of the implementation of Hong Kong's "Stablecoin Regulation." The report pointed out that the core document is the "Guidelines for Regulating Licensed Stablecoin Issuers," while the "Summary Explanation of the Stablecoin Issuer Licensing System" is the most instructive.
According to the timeline, the HKMA encourages prospective applicants to contact the regulator by August 31, while mature applicants have until September 30 to apply. The expected number of initial licenses is only in single digits, with hopes of landing before the end of the year. Chinese institutions suggest that the market continue to focus on two main lines:
Issuers likely to obtain the first batch of scarce licenses: These issuers will serve as market barometers, and their business models and compliance practices will provide references for later entrants.
Platforms that create certainty in stablecoin use cases: The value of stablecoins ultimately reflects their application scenarios, and focusing on those that can actually promote stablecoins in areas such as cross-border payments and digital asset trading will be key to seizing future opportunities.
On the eve of the "Stablecoin Regulation" taking effect, the Hong Kong market is already in a state of flux, with several listed companies actively positioning themselves, but the HKMA has also issued stern investment warnings.
Market Dynamics:
Lianlian Digital (02598.HK): On July 13, it planned to place 38.4 million new H-shares, raising HKD 394 million, intended for the application of blockchain and other innovative technologies in the global payment sector and license expansion.
Jiufang Zhitu: On July 16, it announced plans to place up to 20 million shares, expecting to raise HKD 746 million, intended for nurturing on-chain financial resources, strategic investments in RWA underlying assets, digital asset exchanges, digital asset trust banks, and stablecoin operating entities.
Pandora Bitcoin ETF (02818.HK): On July 16, it announced that its Bitcoin ETF would officially list on the Hong Kong Stock Exchange on July 18, becoming the first Bitcoin ETF approved for listing in Hong Kong this year.
JD Group: Just days before the new digital currency rules in Hong Kong take effect, JD applied for the trademarks "Jcoin" and "Joycoin" through its financial subsidiary JD Coinlink Technology. JD founder Liu Qiangdong announced plans to obtain stablecoin licenses in major countries worldwide, aiming to reduce payment costs by 90% and transfer times to under 10 seconds. The stablecoin JD plans to launch will be pegged to the Hong Kong dollar on a one-to-one basis and operate on a public chain, aiming to become a leading digital currency for businesses and the general public. JD has participated in Hong Kong's stablecoin testing program and is actively seeking to issue a RMB-backed stablecoin in Hong Kong, aligning with China's broader goal of challenging the US dollar's dominance in global payments.
Hong Kong Stock Stablecoin Concept Stock Boom: Since the stablecoin draft was passed, enthusiasm for stablecoins in the Hong Kong stock market has surged. Companies like Guotai Junan International, Jinyong Investment, and China San San Media have seen their stock prices soar, with some even experiencing multiple-fold increases. Established concept stocks like OKLink, Yunfeng Financial, Yixin Group, New Fire Technology Holdings, and OSL Group have also collectively surged. According to Caixin, around fifty to sixty companies are interested in applying for Hong Kong stablecoin licenses, including state-owned enterprises, financial institutions, and internet giants from mainland China.
Investment Warning:
The Hong Kong Monetary Authority sternly reminds market participants to exercise caution when communicating with the public, avoiding statements that may be misunderstood or create unrealistic expectations. According to the "Stablecoin Regulation," falsely claiming to be a license holder or applicant is illegal. As of now, the HKMA has not issued any stablecoin licenses. The public can later check the list of licensed stablecoin issuers published on the HKMA's website. The HKMA emphasizes that the public should remain vigilant against any claims of being regulated or licensed stablecoin issuers in Hong Kong, as well as those claiming to be applying for licenses. Individuals holding unlicensed stablecoins must bear the risks themselves.
The HKMA also pointed out that among the applying institutions, most are only at the conceptual stage, lacking actual application scenarios, while those with application scenarios lack the technology and experience to issue stablecoins and manage various financial risks. This indicates that the HKMA will conduct strict screening to avoid situations of "issuing for the sake of issuing."
The enactment of Hong Kong's "Stablecoin Regulation" is a key step for the region in the global digital finance landscape. The HKMA's cautious attitude and strict regulation aim to create a healthy and sustainable development environment for the stablecoin market. The proactive positioning of giants like JD, along with the close attention of Chinese banks and institutions, suggests that Hong Kong is likely to become an important hub for global stablecoin development, especially in cross-border payments and digital financial innovation.
For investors, while paying attention to the first batch of license holders and potential application scenarios, it is essential to remain calm and think independently, be wary of market speculation, and fully understand the risks of unlicensed stablecoins. The "wind" of stablecoins continues to blow, but only those who "move steadily and far" can seize real opportunities in this wave of digital finance.
Related: Countdown to Hong Kong's "Stablecoin Regulation"! Yuan Coin Technology: Plans to issue Hong Kong dollar stablecoin on Ethereum (ETH)
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