Hong Kong Implements Stablecoin Regulations, Fostering Trust and Innovation

Hong Kong has taken a significant step towards regulating the stablecoin market by introducing new legislation in May 2025. The bill strengthens the regulatory framework for virtual assets and aims to foster innovation while ensuring financial stability. The legislation designates the Hong Kong Monetary Authority (HKMA) as the primary regulator, granting it authority over stablecoin issuers. Licensed institutions now hold the responsibility of issuing fiat-referenced stablecoins (FRS) to retail investors. This shift from traditional market operations is expected to enhance market confidence and clarity.