The Hong Kong Monetary Authority (HKMA) warned that stablecoins issued without a licence will be illegal from 1 August 2025. The new Stablecoin Ordinance will take effect on the same date and capture issuers, promoters, and any OTC shop selling tokens in the city. No licence means no legal operation.
The ordinance demands paid up capital of HKD 25 million and full one-to-one reserves held in top grade liquid assets. The HKMA will serve as the sole licensing body under the Stablecoin Ordinance, and each applicant must pass a “fit and proper” test. Applicants must also set aside at least USD 3.2 million in capital and hold ring faced cash or Treasuries equal to every token sold, with AML and CFT checks running in parallel.
Promoters and OTC desks must also secure licences and keep customer coins with regulated custodians. The ordinance defines a fiat referenced stablecoin as a token whose value tracks a single government currency and whose reserves equal the total supply at all times.
Market impact over HKMA decision
The authority plans to grant only a handful of licences—likely fewer than ten—with the first batch due in early 2026. HSBC, ICBC and over forty other firms have already filed expressions of interest, signaling intense competition for a limited number of approvals.
Adoption is expected to slow as capital and audit costs shut out small innovators. Market share may narrow because only well funded banks or conglomerates can qualify. Risk is expected to drop as daily reserve reports and spot checks aim to cut liquidity but also money-laundering threats, while secondary trading tightens because the 1:1 rule and custodian gatekeepers limit fast arbitrage or off chain settlement.
The calendar forces traders and treasury desks to watch two milestones: the August 2025 cut-off and the licence award window in early 2026.
The HKMA’s clear warning sets a hard line for the stablecoin market. Firms must secure licences, align reserves and custody with the ordinance, or exit the Hong Kong market as the new regime takes hold.
