Starting August 1, Hong Kong will officially enforce a new law that bans the unlicensed promotion of fiat-backed stablecoins. This regulation follows the passage of the Stablecoins Ordinance by the Legislative Council in May 2025.
The statute bars public promotion, issuance, or any transaction relating to unlicensed fiat-referenced stablecoins, which under law are called “specified stablecoins.”
Hong Kong to Enforce Ban on Unlicensed Stablecoin Promotions
The Hong Kong Monetary Authority (HKMA) is tasked with overseeing the new licensing regime. Individuals or companies found violating the ordinance may face penalties of up to HK\$50,000 and a prison term of up to six months. The law applies to both domestic and overseas entities targeting retail users within Hong Kong.
New Legal Measures for Stablecoin Promotion
Pursuant to the ordinance, entities licensed by the HKMA are the only entities permitted to advertise or provide fiat-backed stablecoins to the public. Section 9 of the law renders the unlicensed provision of stablecoins a criminal act, and Section 10 likewise prohibits any unauthorised advertising of these cryptocurrencies.
Under the ordinance, every stablecoin-related transaction within the region must be undertaken within a secure and well-regulated framework.
The HKMA has issued a public notice warning individuals and companies against engaging in any form of unlicensed promotion. In a blog post, HKMA Chief Executive Eddie Yue cautioned that several recent stablecoin campaigns have approached misleading territory, risking harm to retail investors.
He underscored the expanding enthusiasm in the digital asset market and called on the public to remain cautious. Yue stressed that the new regulation is indispensable for shielding the market from manipulation while safeguarding the public interest.
High Demand for Limited Licenses
With the deadline approaching, more than 50 companies have expressed interest in securing a license from Hong Kong authorities. Among the applicants is ChinaAMC, a major asset manager in Asia, and Guotai Junan, a state-backed brokerage. The latter’s stock surged after it received an extension to deal in digital assets.
However, only a limited number of licenses will be granted, raising competition among hopefuls. Although the application process commences in August, a number of firms have already begun their preparations early.
Hong Kong’s Push to Become a Crypto Hub
This regulatory move is part of Hong Kong’s broader strategy to position itself as a digital asset innovation center. Unlike mainland China, which has imposed strict bans on crypto trading, Hong Kong has welcomed regulated market development.
Already, retail investors are permitted to purchase Bitcoin and Ether ETFs. With the introduction of these new compliance frameworks, authorized exchanges and custodians robustly uphold Hong Kong’s dedication to responsible innovation in digital finance.
