Xu Zhengyu: Starting from August 1st, the Hong Kong Monetary Authority will begin accepting applications for stablecoin licenses. Institutions are welcome to apply according to their actual business needs.

On July 2, Hong Kong's Financial Services and the Treasury Bureau Secretary Christopher Hui answered questions from legislator Wu Chi-wai during a Legislative Council meeting. He stated that in May of this year, the Legislative Council passed the "Stablecoin Bill," which establishes a licensing system for issuers of stablecoins pegged to the legal tender in Hong Kong. The bill further enhances the regulatory framework for digital asset activities in Hong Kong to safeguard currency and financial stability, as well as to strengthen Hong Kong's position as an international financial center. The "Stablecoin Bill" will come into effect on August 1 this year, at which point the Hong Kong Monetary Authority (HKMA) will begin accepting license applications. The HKMA is currently conducting market consultations to finalize specific guidelines for the implementation of the bill. The stablecoin licensing system in Hong Kong is flexible and open, allowing licensed issuers to choose different fiat currencies as the anchor for issuing stablecoins. Institutions from different regions around the world are welcome to apply for licenses based on their actual business needs. The government and financial regulatory authorities will closely monitor regulatory developments in different regions and maintain communication with regulatory agencies worldwide. The full text of the original statement follows: Legislative Council Question 5: Promoting the Development of Stablecoins Questions asked by Legislator Wu: The "Stablecoin Bill" passed in May of this year aims to establish a licensing and regulatory system for fiat-backed stablecoin issuers in Hong Kong. Some believe this is a milestone in the global development of Web3 and an important step for Hong Kong to become an international Web3 center. Can the government inform the Council: 1. How will stablecoin use cases be expanded, including connecting stablecoin issuers with applications in the Mainland China to promote the integration of stablecoin from regulatory compliance to commercial ecosystem; 2. How will the government promote the openness and flexibility of Hong Kong's stablecoin regulations on the international stage through the implementation of the "Stablecoin Bill" and leverage Hong Kong's advantages under the "One Country, Two Systems" framework and as an international financial center conducive to the development of stablecoins, attracting globally compliant stablecoin issuers and large international financial institutions to issue stablecoins and establish a presence in Hong Kong; and 3. Will it prepare for the development of offshore Renminbi-backed stablecoins, including seeking central support to establish the credibility of offshore Renminbi-backed stablecoins in Hong Kong? Mr. Chairman, In May of this year, the Legislative Council passed the "Stablecoin Bill" to establish a licensing system for issuers of stablecoins pegged to legal tender in Hong Kong. The bill further enhances the regulatory framework of digital asset activities in Hong Kong to safeguard currency and financial stability, as well as to strengthen Hong Kong's position as an international financial center. The "Stablecoin Bill" will come into effect on August 1 this year, at which point the Hong Kong Monetary Authority (HKMA) will begin accepting license applications. Currently, the HKMA is consulting the market on specific guidelines for implementing the bill in order to finalize them as soon as possible. Regarding the different parts of the question, I will answer the following based on consultations with the HKMA: 1. In order to unleash the potential of stablecoins, the government and regulatory agencies will provide a conducive environment and necessary regulatory guidance to enable licensed stablecoin issuers in Hong Kong to explore and realize different stablecoin use cases to address actual pain points in economic activities, pinpoint regulatory focus on potential risks, and promote sustainable market development. The HKMA launched a sandbox for stablecoin issuers early last year to understand the business models of institutions planning to issue fiat-backed stablecoins in Hong Kong, communicate regulatory expectations, and provide guidance, while promoting the development of practical stablecoin use cases. Participating institutions come from various industries, including cross-border e-commerce and logistics, innovative technology, banks, and telecommunications services, with both local and non-local backgrounds. The sandbox allows participating institutions to experiment with their proposed stablecoin use cases and operations in a limited scope and under controlled risks. Participation in the sandbox is not a prerequisite for future applications for stablecoin issuer licenses. Additionally, the government recently issued the "Hong Kong Digital Asset Development Policy Manifesto 2.0," covering policy directions to advance digital asset use cases and cross-industry cooperation, and elaborating on exploring stablecoins as payment tools. To demonstrate government support for the development of stablecoins and take a leading role, the government is inviting market participants in the manifesto to make suggestions on utilizing licensed stablecoins for government testing and applications, such as how to improve the efficiency of government payments. While developing the market and use cases, operating business compliantly is equally important. Stablecoin issuers in various fields need to have comprehensive support, essential capabilities and experience, such as asset reserve management and asset security systems, effective price stability mechanisms, comprehensive and viable redemption policies, as well as capabilities in technological security, risk management, and anti-money laundering measures. If stablecoin use cases involve other regions, license applicants must have a comprehensive compliance plan and sufficient resources to ensure they and their business partners hold the necessary licenses and comply with relevant regulations in Hong Kong and other regions. 2. The Financial Services and the Treasury Bureau (FSTB) and the HKMA have actively engaged with stakeholders in the local and other regions on the regulatory oversight and development of stablecoins, including potential stablecoin issuers, market participants, and professional service providers. As the "Stablecoin Bill" is about to be implemented, we will step up communication with stakeholders from around the world to explain Hong Kong's stablecoin issuer regulatory framework, emphasizing the framework's balance between risk management and promoting industry development, such as adopting a more open model that allows licensed issuers to choose different fiat currencies as anchors for issuing stablecoins. We will continue to promote Hong Kong's unique advantages as an international financial center through overseas visits and daily work, including close ties with the international community, mature financial markets and infrastructure, a robust legal system, and a pool of professional talents. The recently issued "Policy Manifesto 2.0" signals to the digital asset and related industries worldwide our unwavering determination and policy direction to build Hong Kong into a global digital asset hub. 3. The stablecoin licensing system in Hong Kong is flexible and open, allowing licensed issuers to choose different fiat currencies as anchors for issuing stablecoins. We welcome institutions from different regions worldwide to apply for licenses based on their actual business needs, and we will approve license applications based on unified standards, considering whether issuers comply with regulatory requirements such as asset reserve management, stability mechanisms, redemption arrangements, and internal control measures. The government and financial regulatory authorities will closely monitor regulatory developments in different regions and maintain communication with regulatory agencies worldwide. The development of the digital asset market is fast-paced. The government will continue to adhere to the principle of "same business, same risk, same rules," focusing on risk-based approaches, continuously optimizing and establishing a regulatory system that is tailored to local conditions while following international standards and conventions to promote the healthy, responsible, and sustainable development of the digital asset market in Hong Kong and further consolidate Hong Kong's position as an international financial center. Thank you, Chairman. Concluded 3rd July 2025 (Wednesday) 14:54 HKT