Hong Kong has officially introduced it The long-awaited The stupid Stubcoin licensing regime, which Fiat was referenced on Thursday, tightens surveillance of digital assets as the city pursues its ambition to become a global crypto hub.
Under the new law that came into effect on August 1, businesses that wish to issue or sell term coins to retail investors must first obtain a license from the Hong Kong monetary authority.
Licensing requirements span many compliance areas, including reserve asset management, face value redemption, client fund separation, money laundering anti-laundering protocols, disclosure, operator conformance testing, and more.
The launch of the Stablecoin regime is the latest chapter in Hong Kong’s broader crypto policy overhaul. Over the past few years, the city has implemented a replacement licensing framework and introduced new rules on virtual assets that seek to reshape its position as a financial gateway between China and the world.
Also coming after the US I passed The Genius Act is the first part of the federal government’s Stablecoin Act.
The contrast between the two regimes is remarkable. “The key difference lies in how the government of oversight is structured,” said Yat Siu, co-founder and executive chairman of the Animoca brand. Decryption. “In Hong Kong, the HKMA acts as the only regulator, simplifying things quite a bit, but in the US, regulations are layered by federal and state systems.”
Both frameworks require 100% reserve support to ensure reimbursement stability, but Hong Kong rules are already in effect, offering multi-currency ranges and potentially placing cities as more flexible destinations with global aspirations.
increase
Despite the relatively small domestic market, interest in Hong Kong’s stubcoin is growing.
Andy Kt Lau, partner at David Cameron Law Office, said the client is increasingly considering Stablecoins not only as speculation equipment but also as a potential payment railroad.
“Clients are interested in exploring ways that Stablecoins can facilitate both online and offline transactions, moving beyond mere trading objectives,” he said.
“I have observed a growing interest from clients in forming partnerships with Stablecoin issuers and payment platforms. We anticipate new applications across a variety of sectors, including finance, retail and local businesses,” he added.
“Many of my clients are keen to seize these opportunities and believe that collaboration between traditional financial institutions and digital asset platforms is important to drive Stablecoin adoption.”
However, the situation in consumer payments in Hong Kong is already saturated. Step into any shop and you’ll see terminals for cards like Visa and MasterCard, QR-based systems like Alipay and Wechat Pay, machines to tap on your octopus cards, and cash. Given the crowd, Stablecoins are not expected to become a payment system that you will always rely on as a standalone product that is not integrated into existing systems.
Instead, local businesses say that real opportunities may lie in international applications. The role of Hong Kong’s global trading gives the advantage of cross-border remittances and business payments, especially for businesses struggling with slow banking rails.
In it, Edwin Chen, CEO of Gate Dubai and former head of business development at Gate HK, said. Decryption Businesses in mainland China were “energized” about the Hong Kong administration.
“They want to leverage this Stablecoin regime through their own Stablecoin, or they want to use this Stablecoin technology or blockchain technology to utilize their own payment network within their business.”
Stablecoins are not permitted to be used under strict cryptocurrency regulations in China, but major e-commerce companies such as JD.com and Alipay are Confirmed They are exploring the use of Stablecoin for international business.
Broader use cases
Cheung said he spoke to one travel agency that was interested in using Stablecoins to facilitate payments from the different countries in which they work. He said in some cases it takes up to 30 days to collect fees from various hotels and businesses around the world.
“There’s one timing (used). The other part is that there’s no local bank account or bank rail to collect from hotels in Argentina or Brazil (for example),” he said.
He added that adoption by large corporations has raised greater interest at the retail level and can be compared to Alipay’s move to Hong Kong several years ago.
“Large adoption must come from large companies that have already acquired the ecosystem and are building stablecoin into it and encouraging users to start using it. It will drive growth,” he added.
Despite momentum, concerns remain about cost and accessibility. Some companies, such as payment company Airwallex, have completely denied stubcoin, saying they don’t know how technology can solve the problem with international transfers.
Hong Kong’s rules also support large companies. Under current rules, Stablecoin issuers must have at least 25 million hk in paid-in stock capital, a bar that can block small innovators.
“We need to layer capital requirements to encourage innovation,” said Tiena Sekharan, head of Strategic Reserve Solutions at Chavanette Advisors. Decryption. “If capital is lower than current requirements, it is possible to reduce the volume of issue.”
She also sought a passport mechanism that ensures that companies licensed in compliant jurisdictions such as the US, Singapore and the EU operate in Hong Kong with minimal deficits. “This reduces license costs for compliant users,” she added.