Hong Kong: stablecoins and expansion of virtual asset regulation in 2025
In 2025, Hong Kong made significant progress in regulating virtual assets, particularly stablecoins and related services.
Stablecoins: licensing of FRS issuers
- On 21 May 2025, LegCo passed the Stablecoins Ordinance (Cap. 656).
- Licensing of fiat-referenced stablecoins (FRS) issuers is being introduced.
- The issuance and management of FRS within the framework of regulated stablecoin activities will become:
- licensed;
- supervised by the Hong Kong Monetary Authority (HKMA).
Virtual Assets: custody and dealing — moving towards licensing
- In 2025, the Securities and Futures Commission (SFC) is consulting on the expansion of VA regulation.
- Among the tracks is a legislative proposal to regulate VA custodian services (status: consultation).
- This indicates the formation of separate compliance and licensing contours for custody and dealing, even before the final legislation is adopted.
Practical significance
- Stablecoins in Hong Kong are transitioning to a fully regulated regime.
- VA market participants should note that custody and dealing are moving towards separate licensing in the medium term.
- 2025 will shape the regulatory roadmap for the VA business in Hong Kong.
