Hong Kong expects first stablecoin licenses early 2025, focusing on reserves and AML compliance

Hong Kong's Secretary for Financial Services and the Treasury, Christopher Hui, said on Dec. 19 that authorities had received 36 stablecoin license applications from various sectors by end-September and expect to issue some licenses early next year, with priority given to robust reserve management, price stability and anti-money laundering measures, Hong Kong Economic Times reports. The requirements are designed to protect investors and create a clear compliance path that reduces ambiguities which could trigger trading conflicts, he noted, adding that the city's stablecoin ordinance took effect in August and the Hong Kong Monetary Authority stated in October it will review applications in line with the ordinance and relevant supervisory rules, with only a few licenses to be granted in the first phase due to higher entry thresholds. On virtual asset trading and custody service provider licenses, Hui said the government is working with the Securities and Futures Commission on detailed rules and plans to submit the regime to the Legislative Council next year, stressing the framework will cover key segments of the virtual asset industry and seek a balance between risk management and innovation. He reiterated that the Hong Kong government has carefully crafted these policies to foster innovation without undermining stability, while acknowledging that the People's Bank of China said last month that stablecoins carry risks of being used for illegal activities, which has drawn market attention to whether this could affect Hong Kong's direction on stablecoin development.