2025 is considered the year of stablecoins. On May 21, Hong Kong completed the second and third readings of the "Stablecoin Ordinance" draft, which was officially passed by the Legislative Council and subsequently released on May 29, 2025, with an official implementation date of August 1. This event sparked a wave of enthusiasm both inside and outside the industry, and BlockBeats received numerous related inquiries. We discovered that people are generally concerned about the practical benefits this law could bring and its potential impact on the Web3 community; they also hope to understand whether participants in the industry chain should invest in stablecoin development, from which angles to approach it, and how to apply for relevant licenses if interested in issuing compliant stablecoins as a licensed institution...

Previously, BlockBeats had already provided detailed interpretations of stablecoin core concepts such as definition, characteristics, and functions... Additionally, we discussed stablecoin regulatory focuses and conducted an in-depth comparison of stablecoin regulatory frameworks in the United States and Hong Kong...

· Payment Guarantee: The market value of reserve assets shall not be less than the total face value of unredeemed stablecoins in the market, ensuring full coverage and immediate convertibility;

· Anchored to Hong Kong Dollar Assets: Unless prior written approval is obtained from the Financial Management Commissioner, reserve assets must directly reference the same reference assets anchored by the specified stablecoin;

· The reserve asset portfolio must be of high quality and high liquidity, with minimal investment risk;

· The licensee must establish a risk management and internal audit system;

The licensee must disclose the following information to the public:

· Management policies of its reserve assets;

· Risks and assessment methods that the strategy may bring;

· Composition and market value of its reserve assets;

· Regular independent audit of its reserve assets and audit results.

· The licensee must have a sound control system.

(3) Establish Redemption Mechanism

The licensee must provide redemption rights to each holder of the specified stablecoin it issues, without attaching overly stringent conditions that restrict the redemption of specified stablecoins. No fees shall be charged for redemption.

(4) Appropriate Persons

Appropriate persons refer to the chief executive, directors, stablecoin managers, or controllers of the licensee. The licensee must have and implement a sound and appropriate control system to ensure that the Financial Management Commissioner clearly identifies the identity of each controller.

(5) Management Requirements

Management personnel must possess corresponding professional knowledge and experience, and the licensee needs to manage this accordingly.

(6) Prudence and Risk Management

The licensee must establish and implement sound and appropriate risk management policies and procedures to manage risks arising from its licensed stablecoin activities, including security measures, internal risk control, and effective methods to detect fraud and attempted fraud.

(7) Measures to Combat Money Laundering and Terrorist Financing

The licensee must establish and implement sound and appropriate control systems to prevent and combat potential money laundering or terrorist financing related to its licensed stablecoin activities.

(8) Business Activity Requirements

The licensee must have dedicated and sufficient resources to conduct licensed stablecoin activities. Any activities beyond licensed stablecoins must obtain the approval of the Financial Management Commissioner.

(9) Information Disclosure Requirements

The licensee must publish a white paper for each type of specified stablecoin it issues, providing comprehensive and transparent information. The licensee must also provide information about its complaint handling and compensation mechanism to stablecoin holders.

(10) Recovery Plan and Orderly Scale Reduction

The licensee must have and implement sound and appropriate control systems to make appropriate plans that support the restoration of key functions of stablecoin activities in the event of significant operational disruption. It is evident that the Hong Kong government has maintained consistently high standards and strict requirements for stablecoin license applicants. For institutions planning to apply for a stablecoin license, they must recognize that this is not just a license application process, but a comprehensive test of the company's capital strength, compliance capabilities, and risk control system.

For stablecoin holders, the primary concerns are the safety of the coin's value and payment guarantees. The 'Regulations' establish a relatively robust protection mechanism addressing this point. The 'Regulations' require licensees to possess sufficient reserve assets to support the value of issued stablecoins. These assets must be genuine, highly liquid, and capable of being promptly redeemed when users initiate redemption requests. Additionally, issuers should implement an audit mechanism, with qualified third parties periodically reviewing the matching ratio between reserve assets and total stablecoin issuance to prevent empty or mismatched fund pools. Under normal operating conditions, licensees are not permitted to unreasonably suspend redemption, delay processing, or set harsh redemption thresholds. In case of redemption difficulties, they must immediately report to the Financial Management Commissioner.

Overall, the 'Regulations' provide a systematic and in-depth framework for stablecoin industry compliance and user protection mechanisms. For investors, the most critical aspect is learning to identify licensed stablecoin issuers and rationally participate in stablecoin trading and holding. With the formal implementation of the 'Regulations', marginal projects and niche stablecoins that do not meet licensing standards will inevitably face market clearance or even collapse risks, and investors should remain highly vigilant, avoiding blind pursuit or trusting unauthorized product promotions.

7. How Broad Are the Regulatory Powers of the Financial Authority?

From the above review, it is evident that the Financial Management Commissioner plays a crucial role in Hong Kong's stablecoin regulatory framework. This represents that the Financial Authority not only undertakes the administrative role of license approval but also holds extensive powers of regulation, investigation, and direct intervention. In general, the Financial Management Commissioner possesses license approval and issuance rights; daily regulatory powers; and the power to directly investigate and collect evidence when licensees encounter significant operational risks.

According to Section 5 of the 'Regulations', the Financial Management Commissioner can directly conduct investigations and can instruct or appoint special investigators. Investigators can request evidence, information, or explanations from investigated licensees and can apply to the Court of First Instance. These provisions indicate that the Financial Authority covers almost comprehensive regulatory powers, critically possessing "quasi-judicial" investigative rights with high deterrence and enforcement capabilities.

Crypto Salad Summary:

For projects intending to participate in the Hong Kong stablecoin market as licensees, the 'Regulations' provide a clear framework and path for compliant operations, requiring only a self-assessment of capital and a clear understanding of license application and subsequent compliance maintenance costs.

For most projects not planning to directly apply for a license but hoping to participate in the stablecoin ecosystem, collaborating with licensed or license-applying institutions is an ideal market entry and digital financial business expansion pathway. Such cooperation can cover multiple dimensions, such as providing technical support, custody services, payment integration solutions, cross-border clearing capabilities, or collaborating as ecosystem partners to build compliant wallets and trading interfaces. Particularly, enterprises in payment, Web3 infrastructure, cross-border e-commerce, and compliant custody can ensure business compliance and quickly enter the regulatory-approved stablecoin circulation system through deep collaboration with licensed institutions.

The 'Regulations' stipulate that licensed institutions must disclose license information through official and public channels, making it relatively easy for project parties to identify "true licensees". However, choosing a trustworthy stablecoin licensed institution as a partner should not merely be satisfied with the surface condition of "having a license", but more critically involve a comprehensive assessment of its business capabilities, compliance level, and cooperation potential.

For instance, the safety and transparency of licensees' reserve assets are crucial. Ideal partners should have 1:1 full asset coverage and regularly publish third-party audited reports, clearly specifying reserve currencies, custody institutions, and risk conditions. The ability to support a stable redemption mechanism is also a key criterion, with project parties should focus on whether instant, barrier-free redemption is supported to avoid future liquidity risks. Finally, project parties should also examine the institution's actual market influence, such as integration with mainstream wallets, exchanges, or payment channels, and community reputation.

II. What is the Significance of the 'Stablecoin Regulations Draft'?

1. Policy-Level Significance

In the traditional financial system, monetary issuance rights, also known as coinage rights, have always been controlled by the state. However, in the digital currency era, this power is facing challenges. By establishing a local stablecoin regulatory system through law, Hong Kong is essentially seizing "digital coinage rights", particularly the legal status of Hong Kong dollar-pegged stablecoins.

2. Significance for the Web3 World

Although the Hong Kong government defines stablecoins as payment tools, in the Web3 context, stablecoins remain a key link connecting on-chain and off-chain, traditional and crypto assets. The institutionalization of stablecoins is precisely the key to promoting end-to-end RWA closed loops. In this system, the role of stablecoins may far exceed payment settlement: whether it can permeate the entire process of asset generation, subscription, holding, and circulation exchange is an anticipatory question. With the establishment of a compliant framework, stablecoins are expected to become the "native funding layer" of RWA, reducing dependence on traditional legal currency systems and enhancing on-chain financial efficiency and transparency.

In terms of usage scenarios, international trade remains the largest potential market for stablecoins. Practical issues like cross-border settlement efficiency, foreign exchange costs, and sanction avoidance are continuously increasing corporate interest in on-chain stablecoin tools. Statistics show that stablecoins achieved significant growth in 2024, with remittance volumes exceeding the combined total of Visa and Mastercard. Compliance brings scalability and institutional participation, marking the true commercial starting point for projects.

For native Web3 projects, the greatest impact is not regulation but being incorporated into channels accessing larger-scale assets. Against the backdrop of increasingly scarce "on-chain liquidity", obtaining a compliant identity means connecting with institutional investors, RWA assets, and traditional financial systems, participating in higher-quality and more explosive liquidity release.

3. Is a Renminbi Stablecoin Possible?

Does the implementation of Hong Kong's stablecoin regulation open policy imagination space for a "Renminbi stablecoin"? Although a Renminbi stablecoin remains a sensitive topic, its long-term potential cannot be overlooked. Crypto Salad believes that if a suitable RWA target (such as energy, minerals, overseas bonds, etc.) can be found to provide a stable circulation carrier for a Renminbi stablecoin, its usage logic will be more established. Hong Kong might become a "policy buffer zone" between Renminbi stablecoins and the international Web3 market.

Although Hong Kong leads in legislation, looking at the mainland market, stablecoins still face highly complex regulatory challenges. Due to concerns about financial sanctions and dollar system dependence, many enterprises already have practical needs for "non-dollar settlement tools". However, for regulators, liberalizing stablecoins means confronting:

· Controllability of capital flow and cross-border settlement;

· Pressure on foreign exchange control and financial stability;

· Control over data and financial information security;

· How to interact and differentiate with the existing digital RMB system;

Therefore, Crypto Salad believes that mainland China is unlikely to replicate Hong Kong's approach in the short term, but Hong Kong's "experimental field" experience might provide a blueprint for exploring broader digital financial strategies in the future.

III. Conclusion

With the official implementation of the "Regulations", Hong Kong has undoubtedly taken a key step in the global stablecoin regulatory race. This is not only an innovation in local financial policy but also a strategic exploration of the entire Web3 ecosystem, RWA, and even the global monetary landscape. Although in this article, the crypto salad has provided a detailed interpretation of the key provisions of the "Regulations", we believe that what is truly worth paying attention to is not how a specific clause is stipulated, but the opening of a brand new institutional space. At a time when global digital currency policies have not yet been unified, Hong Kong has provided a clear roadmap: legalizing, systematizing, and industrializing stablecoins. For the entire Web3 world, this is both a challenge and an opportunity.

IV. Invitation to the Third RWA Closed-Door Exchange Meeting of Hong Kong Zhiheng Law Firm

Facing RWA, are you encountering such issues: Many institutions want to participate but are hesitant, especially when project startup requires millions of dollars invested without knowing if it will be effective. Asking various institutions in the market, the responses are that projects directly aimed at financing are not accepted, and most only do the work without underwriting. Is it worth spending such a large sum? Is it necessary for oneself to participate in the RWA trend? With Guotai Junan, Ant Group, and JD.com all entering the field, the trend has indeed arrived. Why can't your own project do RWA, and what prerequisites need to be met?

Market information is mostly fragmented. How do real institutional players actually operate? Many people still feel that the information is scattered and cannot see the logic clearly. Rather than that, why not bring your questions to an in-depth research session? We will gather eight renowned RWA successful case implementation teams to unveil the stories behind them and deconstruct the core logic of successful projects.

The third RWA Closed-Door Symposium by Hong Kong Zhiheng Law Firm, as the designated venue for the RWA in-depth research conference, has comprehensively upgraded its content. It integrates experts to diagnose projects on-site, clarifying your project's possibilities and success rate, directly completing the financing closed loop. Interested friends are welcome to contact us.

Original article link

Click to learn about BlockBeats job openings

Welcome to join the official BlockBeats community:

Telegram Subscription Group: https://t.me/theblockbeats

Telegram Communication Group: https://t.me/BlockBeats_App

Official Twitter Account: https://twitter.com/BlockBeatsAsia