Hong Kong Launches Tough Stablecoin Rules as $1.5B Pours into Crypto Startups

Hong Kong is making a powerful move to lead the digital finance future. The city is setting the stage to become Asia’s top crypto hub.

As of August 1, Hong Kong’s new Stablecoin Ordinance is officially in force. The HKMA (Hong Kong Monetary Authority) has issued detailed licensing guidelines covering capital, custody, KYC, reserves, and governance standards.

Under the new law, any company offering stablecoins to the public must first get licensed by the HKMA.

Hong Kong Sets Strict Rules for Stablecoins

The Hong Kong Monetary Authority (HKMA) has rolled out a detailed licensing regime that covers everything from capital requirements and custody to KYC checks, fiat reserves, and governance standards.

Any company that wants to issue stablecoins to the public in Hong Kong must first get a license from the HKMA. The new law requires that all stablecoins be fully backed by fiat currency, with the backing held in regulated banks. 

The rules also focus on real-time transparency and strong anti-money laundering controls.

HKMA is being cautious. It warned that several firms are making loud claims without solid business plans, and reminded the market that speculation and hype won’t lead to approval. Only a limited number of licenses will be issued initially, and even those companies should not expect quick profits.

Stablecoin Licences Expected in 2026

As per a report from Reuters, the first batch of issuer licences is now expected early next year, according to the HKMA, and not 2025 as earlier expected.

No licenses have been issued yet, but the HKMA is open to early conversations with applicants until August 31. The official application deadline is set for September 30.

The regulator is moving slowly and carefully to ensure the long-term safety and sustainability of the stablecoin market.

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Hong Kong Fintechs Raise Over $1.5B in July

Fintech companies in Hong Kong are racing to raise funds as the city kicks off its new stablecoin licensing regime. In July alone, over $1.5 billion was raised by at least 10 publicly listed companies. 

OSL, for instance, raised $300 million in just three days, drawing big investors like hedge funds and sovereign wealth funds. Other major players like Dmall and SenseTime are also pouring capital into digital payments and blockchain technology.

Venture-backed firms are joining the rush too. Payment startup Kun secured $50 million in funding last month, and momentum is building across both public and private markets.

Companies like SenseTime and JF SmartInvest are now heavily investing in digital asset projects, including tokenized real-world assets (RWAs), with stablecoins becoming a key part of this growing ecosystem.

Stablecoins Are Not Just for Trading! 

More firms are seeing stablecoins not just as a trading asset, but as a practical tool for payments, remittances, and cross-border transfers. 

However, the market is not without its challenges. Hong Kong already has a crowded payments space, and high upfront costs for licensing and compliance could make it difficult for smaller startups to enter the game. 

Some experts believe the current rules may need to be adjusted to allow more room for true innovation.

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If Hong Kong gets the balance right between regulation and innovation, it could shape the next phase of the crypto industry not just regionally, but globally.

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