Hong Kong’s new stablecoin law sets a global standard but might initially sideline innovative start-ups while encouraging big local and mainland financial firms to participate in the cryptocurrency sector’s growth, industry experts said.
A limited number of issuers would initially emerge in Hong Kong, analysts said. These would primarily be major local and mainland Chinese firms, as some smaller start-ups and fintech innovators would be deterred, they said.
“For applicants, it’s a double-edged sword, as the costs of entry and operations are too high for some,” Spiegl said. “For major banks and large, well-capitalised global crypto firms that want a ‘gold standard’ licence to minimise risk and signal trust, Hong Kong’s tough stance might actually be a draw.”
Hong Kong’s strict rules contrast with Singapore’s base capital requirement of at least S$1 million (US$776,367) and the rules in the US, which just require that the amount be sufficient to ensure ongoing operations.
