Hong Kong lawmakers passed a law on Wednesday that establishes a regulatory regime for stablecoins, paving the way for issuers to obtain licences and sell the digital assets to the public.
A stablecoin is a type of cryptocurrency that is pegged to a specific reserve asset, such as the US dollar or any fiat currency.
“The ordinance has established a risk-based, pragmatic, and flexible regulatory regime,” Eddie Yue Wai-man, chief executive of the HKMA, said in a statement on Wednesday. A “robust and fit-for-purpose regulatory environment” would support the “healthy, responsible and sustainable development” of Hong Kong’s ecosystem for stablecoins and digital assets more broadly, Yue said.
Globally, stablecoin trading volume reached US$27.6 trillion in 2024, according to a report by cryptocurrency exchange operator CEX.io, surpassing the combined volume of Visa and Mastercard transactions over the same period.
HKMA said it would soon conduct further consultations on details of the regime, such as reserve requirements, client asset segregation, risk management, disclosures and other issues.
