The Hong Kong Special Administrative Region Legislative Council passed the "Stablecoin Regulation Bill" on May 21, 2025, marking Hong Kong as the first global jurisdiction to establish a comprehensive regulatory system for fiat-backed stablecoins. This legislative action not only provides a clear legal framework for the virtual asset industry in Hong Kong but also brings profound positive impacts on the virtual currency industry in Hong Kong and Mainland China by balancing financial innovation and risk prevention. Lawyer Liu (web3_lawyer) analyzes the positive significance of the bill's passage from the perspectives of Hong Kong and Mainland China, combining policy background, industry impact, and future trends.
I. Positive Impacts on Hong Kong
(I) Strengthening Hong Kong's Position as a Global Digital Asset Center
As an international financial center, Hong Kong has been continuously focusing on the virtual asset field in recent years. The passage of the "Stablecoin Regulation Bill" further consolidates Hong Kong's leadership in the global digital asset market. The bill clearly defines regulatory requirements for stablecoin issuers, including a registration capital threshold of 25 million Hong Kong dollars, 1:1 reserve asset anchoring, and mandatory unconditional redemption rights. These strict yet clear regulatory standards provide a transparent compliance environment for the stablecoin market, helping to attract global investors and enterprises to choose Hong Kong as an operational center for stablecoin business.
Additionally, the Hong Kong Monetary Authority plans to quickly issue regulatory guidelines after the bill's passage and open license applications by the end of 2025. This will attract institutions like Standard Chartered Hong Kong and Anyi Group to actively participate, accelerating the development and application of Hong Kong dollar stablecoins. The launch of Hong Kong dollar stablecoins will not only enhance Hong Kong's competitiveness in cross-border payments but also promote the Web3 ecosystem, injecting new vitality into Hong Kong's digital economy. For example, Hong Kong dollar stablecoins can be used for efficient, low-cost cross-border trade settlement, further consolidating Hong Kong's position as an Asian financial hub.
(II) Promoting Financial Innovation and Technological Development
The passage of the "Stablecoin Regulation Bill" demonstrates that the Hong Kong government views stablecoins as an important component of digital financial infrastructure, rather than a marginal technology. The bill provides a clear compliance path for stablecoin issuers, encouraging enterprises to innovate technologically within the regulatory framework. For instance, JD Group has entered the stablecoin "sandbox" testing phase in Hong Kong, indicating the enterprise's confidence in the market. This "regulatory sandbox" mechanism allows enterprises to test innovative products in a controlled environment, reducing compliance costs for startups while providing space for technological iteration.
As a core component of decentralized finance (DeFi), the legalization of stablecoins will promote further development in areas such as Web3, Non-Fungible Tokens, and metaverse. The Hong Kong government has been laying out virtual asset regulation since 2022, conducting public consultations in 2023 and launching a regulatory sandbox in 2024, showing long-term support for the Web3 ecosystem. The bill's passage will further stimulate blockchain technology applications in payments, settlement, and supply chain finance, creating a vibrant digital asset ecosystem for Hong Kong.
(III) Enhancing Market Confidence and Investor Protection
The virtual asset industry has faced a trust crisis due to past events (such as the FTX collapse). By establishing a comprehensive stablecoin regulatory system, Hong Kong emphasizes reserve asset management, liquidity, and anti-money laundering (AML) requirements, effectively reducing market risks. These measures ensure the sustainability of stablecoin issuers' business models while providing higher safety guarantees for investors. For example, mandatory 1:1 reserve asset requirements and unconditional redemption rights can effectively prevent stablecoin de-pegging risks, enhancing market trust in stablecoins.
Moreover, Hong Kong's regulatory framework seeks balance between innovation and protection, demonstrating an open and inclusive attitude. This balance not only attracts global crypto enterprises but also provides safer investment channels for local retail investors. For instance, ZA Bank has pioneered virtual asset trading services, supporting Bitcoin and Ethereum transactions, and may further expand to stablecoin trading in the future. This demonstration effect of pioneers will encourage more financial institutions to enter the virtual asset market, expanding Hong Kong's investor base.
(IV) Promoting Cross-border Payments and Financial Interconnectivity
Stablecoins have advantages of low cost and high efficiency in cross-border payments, and Hong Kong's stablecoin bill lays the foundation for widespread application of Hong Kong dollar stablecoins. The launch of Hong Kong dollar stablecoins will optimize financial interconnectivity between Hong Kong and other Asian regions, especially in the "Belt and Road" initiative and Guangdong-Hong Kong-Macau Greater Bay Area construction. For example, Hong Kong dollar stablecoins can be used for cross-border e-commerce, trade settlement, and supply chain finance, reducing transaction costs and improving settlement efficiency. This not only helps Hong Kong consolidate its position as a global trade center but also provides local enterprises with more digital financial tools.
II. Positive Impacts on Mainland China
(I) Providing Regulatory Experience Reference
Mainland China has a strict regulatory attitude towards virtual currencies, prohibiting crypto trading and ICOs, but maintains an open attitude towards blockchain technology. The passage of Hong Kong's "Stablecoin Regulation Bill" provides a referenceable regulatory model for Mainland China. Hong Kong's regulatory framework emphasizes compliance, risk prevention, and balance between financial innovation, which aligns with Mainland China's policy goals of promoting blockchain technology in the financial sector (such as digital renminbi).
For example, Hong Kong's "regulatory sandbox" mechanism provides a testing environment for stablecoin issuance, and this model may inspire Mainland China to explore similar pilot mechanisms in specific areas (such as CBDC or supply chain finance). As a bridge between Mainland China and international markets, Hong Kong's successful experience may promote Mainland China to gradually relax regulatory restrictions on virtual assets like stablecoins, especially in the realm of stablecoins pegged to Hong Kong dollars or renminbi.
(II) Promoting Renminbi Internationalization
Hong Kong's stablecoin bill provides an experimental field for non-US dollar stablecoins (such as those anchored to Hong Kong dollars or renminbi). Although current stablecoin regulation in Hong Kong mainly focuses on Hong Kong dollar stablecoins, its open regulatory attitude provides possibilities for exploring renminbi stablecoins. As an offshore renminbi center, Hong Kong has mature financial infrastructure and an internationalized market environment, making it suitable for testing renminbi stablecoins. If renminbi stablecoins succeed in Hong Kong, it will further promote renminbi usage in global payments and settlements, supporting the renminbi internationalization process.
For instance, Hong Kong's stablecoin regulatory framework may provide compliance channels for Mainland Chinese enterprises to issue renminbi-anchored stablecoins through Hong Kong issuers for cross-border trade and investment. This model can not only enhance renminbi's international acceptance but also provide new financing and payment tools for Mainland Chinese enterprises, increasing their competitiveness in the global market.
(III) Promoting Financial Technology Collaboration in the Guangdong-Hong Kong-Macau Greater Bay Area
The Guangdong-Hong Kong-Macau Greater Bay Area is a crucial region for Mainland China to promote financial technology and blockchain technology applications. Hong Kong's stablecoin bill provides new opportunities for financial technology collaboration in the Greater Bay Area. For example, Hong Kong dollar stablecoins can complement digital renminbi, jointly serving cross-border payment, trade finance, and supply chain finance needs in the Greater Bay Area. Hong Kong's regulatory experience and mature financial market can provide compliance guidance for Greater Bay Area enterprises, attracting more Mainland Chinese tech companies to enter the international market through Hong Kong.
Moreover, virtual asset trading platforms and stablecoin issuers in Hong Kong may collaborate with mainland enterprises to develop blockchain-based financial products. For example, stablecoins could be used in supply chain finance platforms in the Greater Bay Area, addressing financing challenges for small and medium-sized enterprises. Such cross-regional cooperation will promote the integration and development of the financial technology ecosystem in the Greater Bay Area.
(IV) Indirectly Stimulating Blockchain Technology Application in Mainland China
Although mainland China maintains a cautious attitude towards cryptocurrency trading, blockchain technology has been widely applied in areas such as supply chain finance, cross-border payments, and digital identity authentication. Hong Kong's stablecoin legislation provides successful commercial application cases for blockchain technology, potentially indirectly stimulating mainland enterprises to accelerate blockchain technology research and development within a compliant framework. For instance, Hong Kong's stablecoin "sandbox" testing experience can provide technological references for mainland enterprises, promoting blockchain implementation in the financial technology sector.
III. Future Trend Outlook
The passage of Hong Kong's Stablecoin Bill marks a new stage in global stablecoin regulation. In the future, Hong Kong may become a global experimental ground for non-USD stablecoins, attracting more international enterprises to enter its market. Meanwhile, Hong Kong's regulatory model may provide references for other countries and regions, promoting global stablecoin regulatory coordination and development.
For mainland China, Hong Kong's successful experience may encourage regulatory authorities to gradually relax restrictions on virtual assets in the future, especially in areas related to RMB internationalization. Mainland enterprises can participate in the global digital asset market through Hong Kong's compliant channels, enhancing international competitiveness. Additionally, financial technology cooperation between Hong Kong and mainland China will be further deepened within the Guangdong-Hong Kong-Macau Greater Bay Area framework, forming a model of regional collaborative development.
IV. Concluding Remarks
The passage of Hong Kong's Stablecoin Bill has far-reaching positive impacts on the virtual currency industry in Hong Kong and mainland China. For Hong Kong, the bill consolidates its position as a global digital asset center, promoting financial innovation, investor protection, and cross-border payments. For mainland China, Hong Kong's regulatory experience provides a reference, driving RMB internationalization, financial technology collaborative development in the Greater Bay Area, and indirect stimulation of blockchain technology applications. In the future, as Hong Kong's stablecoin market matures and cooperation with mainland China deepens, both sides will occupy a more important position in the global digital finance field, injecting new momentum into regional economic development.
This represents only the author's personal views and does not constitute legal consultation or legal opinion on specific matters.
