Hong Kong has officially commenced the review of stablecoin license applications, marking a significant step in its new regulatory framework for the cryptocurrency sector. This initiative is part of the city’s broader strategy to establish itself as a regulated cryptocurrency hub in Asia. The announcement was made by Christopher Hui, Secretary for Financial Services and the Treasury, during a policy briefing at the Legislative Council Finance Committee on January 30, 2024.
Stablecoin Licensing Regime Now Active
The Stablecoin Ordinance became effective in August 2024, introducing a licensing system specifically for fiat-denominated stablecoin issuers operating in Hong Kong. The Hong Kong Monetary Authority (HKMA) is currently processing applications from entities seeking to comply with these new regulations. This development positions Hong Kong among the few major financial centers worldwide that have established a transparent path for stablecoin licensing.
Hui detailed that the HKMA is actively engaged in reviewing license applications, which is expected to enhance the operational landscape for stablecoin issuers in the region. He also indicated that a comprehensive regulatory framework for all virtual assets would be presented to the legislature later this year.
Future Regulations and Crypto Tax Reporting
The push for stablecoin regulation is only one facet of Hong Kong’s evolving cryptocurrency landscape. Hui announced plans to submit a draft ordinance covering a broader range of virtual asset services—including trading platforms, custody providers, advisory services, and asset management—to the Legislative Council by 2026. The Financial Services and Treasury Bureau (FSTB) along with the Securities and Futures Commission (SFC) concluded consultations on trading and custody rules in December 2023, while discussions regarding advisory and management services continue.
Additionally, starting in 2028, Hong Kong will implement the OECD’s Crypto-Asset Reporting Framework (CARF), facilitating the automatic exchange of cryptocurrency transaction tax data with other jurisdictions. Currently, public input on these legislative proposals is being solicited.
This regulatory momentum aligns with Hong Kong’s ambitions to reinforce its role as an international financial center, as outlined in China’s 15th Five-Year Plan. For cryptocurrency firms observing developments in Asia, Hong Kong has clearly signaled its intentions to foster a compliant and structured environment for digital asset operations.
