Key takeaways
- Hong Kong's Stablecoins Ordinance (Cap. 656) took effect on 1 August 2025, creating a licensing regime for issuers of fiat-referenced stablecoins.
- A licence from the Hong Kong Monetary Authority (HKMA) is required to issue fiat-referenced stablecoins in Hong Kong, or to issue a Hong Kong dollar-referenced stablecoin anywhere.
- Stablecoins must be fully backed by high-quality, highly liquid reserve assets, kept separate from the issuer's own assets through effective trust arrangements.
- Valid redemption requests from onboarded holders must be processed at par within one business day, and licensees need paid-up capital of at least HK$25 million.
The regime
Hong Kong's Legislative Council passed the Stablecoins Bill in May 2025 and the Stablecoins Ordinance took effect on 1 August 2025. It regulates fiat-referenced stablecoins, tokens designed to hold a stable value against one or more official currencies. Any person issuing such a stablecoin in Hong Kong, or issuing a stablecoin that references the Hong Kong dollar wherever it is issued, needs a licence from the HKMA. Only licensed stablecoins can be offered to the Hong Kong public.
The regime allows reserve assets to be held outside Hong Kong in some multi-jurisdiction issuance arrangements, with HKMA approval, which matters for issuers that also serve US or EU markets. Entities already issuing stablecoins before 1 August 2025 were given a transitional period, but the HKMA has said that a shell company set up before that date does not qualify.
Licensees must be incorporated in Hong Kong, unless they are banks authorised in Hong Kong. The HKMA's guideline on supervision of licensed stablecoin issuers sets out detailed expectations on reserves, redemption, risk management and governance.
The HKMA has signalled that it expects to grant only a small number of licences at first, focusing on applicants with credible use cases, strong risk management and the ability to meet the reserve and redemption standards from the first day of issuance.
The main requirements
The table summarises the requirements most relevant to treasury, finance and compliance teams.
| Area | Requirement |
|---|---|
| Backing | Every outstanding stablecoin fully backed one to one by a pool of reserve assets |
| Reserve quality | High quality, highly liquid, minimal investment risk; in the referenced currency |
| Segregation | Reserve pool kept separate from the licensee's other assets through effective trust arrangements |
| Redemption | Valid requests from onboarded holders processed at par within one business day, without unduly burdensome conditions |
| Capital | Paid-up share capital of at least HK$25 million, or another amount approved by the HKMA |
| Audit and reporting | Regular audits of reserve assets and reporting to the HKMA |
What it means operationally
The one-business-day redemption standard is among the strictest in the major regimes. Treasury must keep enough of the reserve in assets that can be turned into cash the same day to meet redemptions, even in a busy period, while still meeting the quality and currency rules. That makes the daily reserve position, by asset and by maturity, a core management report.
Full backing must be maintained continuously, which requires a daily reconciliation of tokens outstanding, across every network on which the stablecoin is issued, against reserve assets confirmed by banks and custodians. Our guide to stablecoin reserve reconciliation sets out the process.
Licensees should also reconcile redemptions daily: every redemption request received, the tokens burned and the cash paid out should agree, and any request not completed within one business day should be visible and explained.
Many Hong Kong issuers will also be subject to the US GENIUS Act or EU MiCA if they offer tokens in those markets. The requirements are similar in principle but differ in detail, including on redemption timing, eligible reserve assets and reporting frequency. One reconciled data set that can be reported several ways is the efficient approach.
How Safeheld supports it
Safeheld reconciles on-chain supply, the issuance ledger and reserve accounts every day, tests coverage and liquidity, and supports reporting under Hong Kong, US and EU regimes. See proof of reserves vs attestation and Hong Kong SVF float safeguarding.
Frequently asked questions
When did Hong Kong's Stablecoins Ordinance take effect?
On 1 August 2025.
Who needs an HKMA stablecoin licence?
Anyone issuing a fiat-referenced stablecoin in Hong Kong, or issuing a Hong Kong dollar-referenced stablecoin anywhere.
How quickly must Hong Kong stablecoins be redeemed?
Valid redemption requests from onboarded holders must be processed at par within one business day, unless the HKMA approves otherwise.
What capital must a licensed stablecoin issuer hold?
Paid-up share capital of at least HK$25 million, or another amount approved by the HKMA.
References
About Safeheld
Safeheld reconciles client money every day, resolves every difference and prepares every regulatory return for sign-off, for regulated firms in the United States, the United Kingdom, the European Union, Canada, Australia, Singapore and Hong Kong. To discuss your operations, contact us at safeheld.com/contact.
This article is for general information and does not constitute legal or regulatory advice.