A Guide for Ordinary People to "Get On Board" Under Hong Kong's Stablecoin Regulations

Introduction: Hong Kong Leads the Way in Stablecoin Compliance

The virtual currency market has undergone significant transformation globally, shifting from rapid growth to strict regulation. Stablecoins, which bridge digital assets and the real economy, have become a focal point due to their stability, compliance, and practical applications.

In 2025, Hong Kong made history by passing the world's first comprehensive stablecoin regulatory bill, the "Stablecoin Ordinance," effective August 1. This landmark legislation:

✅ Brings stablecoin issuance, circulation, and investment under a legal framework;
✅ Enables financial institutions and tech companies to launch compliant stablecoin products;
✅ Offers ordinary investors a safe, transparent environment to engage with stablecoins.

This policy not only strengthens Hong Kong's role as a global digital finance hub but also creates opportunities for investors, cross-border users, and asset allocators.

I. Policy Overview: Hong Kong's "Stablecoin Ordinance"

1️⃣ Broad Regulatory Scope

• Covers stablecoins pegged to fiat currencies (HKD, USD, RMB) issued in Hong Kong;
• Includes overseas stablecoins pegged to HKD or marketed to Hong Kong residents.

Key Takeaway: Any activity involving Hong Kong’s market or HKD pegging requires a license to prevent regulatory loopholes.

2️⃣ Strict Compliance Framework

Three Pillars of Regulation:

1. Issuance Access

   • Non-bank institutions need HKD 25 million in paid-up capital (banks exempt).
   • Reserve assets must be 100% liquid (cash/short-term bonds).
   • Key roles (CEO, CFO) must be Hong Kong-based.

2. Technical Security

   • Monthly smart contract audits by the Monetary Authority.
   • Real-time on-chain monitoring of reserve funds (e.g., via Chainlink).

3. Application Boundaries

   • No interest payments to avoid deposit-like products.
   • Restrictions on cross-border promotion to Hong Kong residents.

3️⃣ Sandbox Mechanism

3.1 Regulatory Sandbox
The Hong Kong Monetary Authority allows select institutions to test stablecoin issuance under controlled conditions.

3.2 Current Participants (June 2025)

• JD Coin Chain Technology (JD-HKD)
• Standard Chartered Bank + Anxin Group + Hong Kong Telecom (HKDG)
• Yuan Coin Innovation Technology (HKDR)
• Ant Group (Ant International, Ant Digital)
• Animoca Brands Limited

Note: Sandbox participation ≠ full licensing. Formal approvals will follow post-implementation reviews.

II. Investment Opportunities: Licensed Stablecoin Ecosystem

Equity Perspective of Sandbox Participants

▶ Baishida Holdings (01168.HK)

• Subsidiary ZhongAn Bank provides fiat custody for stablecoin issuers.
• Market cap of HKD 1.97 billion undervalues its compliance role.
• Potential revaluation if granted custody qualifications.

▶ Sifang Jingchuang (300468.SZ)

• Developed stablecoin clearing systems for HSBC/Standard Chartered.
• FINNOSafe platform offers issuance/custody services.
• Q1 2025 orders grew 230% YoY.

III. Practical Applications: Cross-Border Payments & RWA

1️⃣ Cross-Border Payment Revolution

JD-HKD Stablecoin Use Cases (Per TECHHUB NEWS):

• Instant Transfers: Reduces costs by ~90% vs. SWIFT’s 1-3% fees.
• Investment Trading: Compliant exchanges leverage HKD-pegged stability.
• Retail Payments: Future integration with JD’s e-commerce platforms.

Liu Qiangdong’s Vision (June 2025):

"Stablecoins will empower global consumers to pay seamlessly without currency exchange hurdles."

2️⃣ Real Asset Tokenization (RWA)

• Case Study: Ant Digital’s Jovay blockchain tokenized HKD 320M in charging pile revenue rights.
• Compliance Notes: Mainland investors can use USD 50,000 annual FX quota; avoid gray-market channels.

IV. Risk Mitigation: Avoiding Pitfalls

⚠️ Red Flags in Stablecoin Investments:

1. Unlicensed projects falsely claiming compliance.
2. Overseas products marketed to Hong Kong without Monetary Authority approval.
3. Non-compliant fund flows or underground banking (rates <1% signal risk).
4. Platforms offering "high yields"—Hong Kong bans stablecoin interest payments.

V. Future Trends & Strategic Steps

1️⃣ Policy Window Opportunities

• First-maker advantage for early licensees (e.g., JD, Ant, Standard Chartered).
• Multi-currency stablecoin matrix (HKD/USD/offshore RMB) to boost Hong Kong’s financial hub status.

2️⃣ Steps for Ordinary Investors

✅ Step 1: Track policy updates (August 1 implementation).
✅ Step 2: Open Hong Kong bank/exchange accounts (complete KYC).
✅ Step 3: Start small—test stablecoin payments/investments via licensed platforms.

Pro Tip: Always verify platform licenses, KYC, and AML compliance. Avoid unregulated products.

👉 Learn more about compliant stablecoin investments

Conclusion

Hong Kong’s "Stablecoin Ordinance" marks a turning point:
✅ Democratizes access to compliant virtual asset participation.
✅ Bridges real-world financial needs with blockchain efficiency.
✅ Positions stablecoins as next-gen financial infrastructure.

The era of regulated stablecoins is here—understand the rules, seize the opportunity.

FAQs

Q1: Can mainland Chinese residents legally invest in Hong Kong stablecoins?
A: Yes, using the annual USD 50,000 FX quota. Avoid unlicensed platforms.

Q2: How do stablecoins reduce cross-border payment costs?
A: By bypassing intermediaries like SWIFT, cutting fees by ~90% and enabling instant settlements.

Q3: What’s the biggest risk with stablecoins?
A: Unlicensed issuers or platforms promising unrealistic returns. Stick to Monetary Authority-approved options.

👉 Explore secure stablecoin strategies

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