Hong Kong Stablecoin Regulation: Prudent Advancement and Strict Oversight

Recently, multiple regulatory departments in Hong Kong have frequently expressed a cautious attitude towards the development of stablecoins, emphasizing that stablecoins are not speculative tools but should return to their original intention of enhancing the efficiency of the real economy. This reflects that Hong Kong is raising the regulatory standards for stablecoins to a level comparable to traditional finance.

As the world's first comprehensive regulatory framework for fiat stablecoins, Hong Kong's "Stablecoin Ordinance" will come into effect on August 1. The Financial Management Authority will begin accepting license applications at that time. However, regulators have made it clear that, considering risk management and market capacity, the initial issuance of licenses will be strictly controlled, with only a few licenses expected to be granted.

Despite the high enthusiasm in the market, at least 9 institutions have expressed their intention to apply for a license, but regulatory authorities emphasize that they will carefully consider all applications according to strict standards. The application threshold is considered to be close to the regulatory levels of electronic wallets and banks, requiring applicants to establish a comprehensive compliance system in areas such as anti-money laundering and transaction monitoring.

Regarding the timeline, the Hong Kong SAR government stated that it aims to issue the first batch of licenses within this year. However, before that, regulatory authorities still need to consult the market on specific implementation details and publish relevant guidelines. This means that the entire approval process may take some time.

There is still uncertainty regarding the specific application scenarios of stablecoins. Areas such as cross-border payments are considered potential key application directions, but regulators emphasize that stablecoins should be implemented around the needs of the real economy, rather than becoming speculative tools.

It is worth noting that some market participants wish to issue stablecoins denominated in RMB. In this regard, some experts believe that there is a possibility from a legal and strategic perspective, but further clarification of policy support is still needed.

Overall, Hong Kong is adopting a prudent approach to advancing stablecoin regulation, encouraging innovation while strictly controlling risks, in order to establish a trusted stablecoin market. This practice may serve as a reference for global stablecoin regulation.