Why Hong Kong's stablecoin law is a smart financial move
stablecoin bill passed with little fanfare recently. Yet across Asia's financial centres, the legislation has focused minds. The city has quietly created the region's first mandatory licensing regime for digital currencies, a strategic gambit to retain its position as Asia's financial capital.
The new law, overseen by the
Hong Kong Monetary Authority (HKMA), applies to any stablecoin pegged to the Hong Kong dollar or issued locally. It requires one-to-one reserve backing, a minimum capital of HK$25 million (US$3.19 million) and quarterly audits. More ambitiously, it grants Hong Kong authority over any foreign stablecoin promoted, marketed or made available to the public in Hong Kong, a direct challenge to regulatory arbitrage elsewhere.
While competitors hedge their regulatory bets, Hong Kong has made a different wager: that institutional investors value clarity and transparency over tax incentives and regulatory arbitrage. In doing so, Hong Kong has pulled ahead.
Singapore introduced a voluntary framework in 2023, allowing unlicensed operation if issuers avoid public marketing (and comply with existing regulation). The United Arab Emirates still restricts stablecoin and only recently began implementing comprehensive rules. Hong Kong's approach is mandatory, detailed and already operational through a
pilot sandbox
The ordinance plugs into the broader digital infrastructure the city has quietly built to reassert its financial supremacy. The Securities and Futures Commission now
licenses virtual-asset platforms. Asia's
first spot bitcoin and ether exchange-traded funds (ETFs) are listed in Hong Kong.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
South China Morning Post
7 hours ago
- South China Morning Post
Donald Trump and Xi Jinping tipped to meet ahead of or during Apec summit in South Korea
This year's Asia-Pacific Economic Cooperation summit in South Korea is probably the best opportunity for Xi Jinping and Donald Trump to meet in person this year, multiple sources have said. They said Trump might visit China before going to the Apec summit between October 30 and November 1, or he could meet his Chinese counterpart on the sidelines of the Apec event. According to South Korean media reports, Xi plans to attend the event in Gyeongju, but Trump's participation is yet to be confirmed. Earlier this month Chinese Foreign Minister Wang Yi and US Secretary of State Marco Rubio had their first face-to-face meeting – a potentially important step towards the two presidents meeting. Meanwhile, in a phone call last month, Xi invited Trump and his wife to visit China, an invitation the US president reciprocated. Rubio told reporters after meeting Wang that there was a 'strong desire on both sides' for a meeting between the two presidents. US-China relations have fluctuated since Trump returned to the White House in late January and threatened heavy tariffs of up to 145 per cent on Chinese goods. Since then, however, both sides have worked to stabilise relations, agreeing on a preliminary trade deal that eases China's rare-earth export restrictions and US technology trade barriers.
South China Morning Post
9 hours ago
- South China Morning Post
As trade deals show, the US now seeks rent from Asean, not partnership
US President Donald Trump's return to tariff diplomacy is on full display in Southeast Asia as he boasts of trade deals with first Vietnam , then Indonesia . The region faces some of the world's steepest US tariffs come August 1, and many countries have rushed into last-minute talks to avoid economic fallout. Advertisement Trump has announced a 19 per cent tariff on all Indonesian goods entering the United States under a deal, down from 32 per cent, with Indonesia agreeing in return to buy 50 Boeing jets and spend US$19.5 billion on US energy and farm products – essentially prepaying for tariff relief. This mirrors Vietnam's deal of a 20 per cent tariff, down from 46 per cent, by essentially agreeing to curb Chinese transshipments. Since Trump launched his global tariff war in April, introducing a baseline 10 per cent and threatening additional tariffs unless countries negotiated US trade deals, few countries have signed up. Other than Vietnam and Indonesia, only Britain has a deal. Others, such as the European Union, are readying retaliatory measures even as they continue to negotiate a deal. For Southeast Asia, these arrangements signal a shift in the US trade strategy – one that threatens to turn Asean members from competitive manufacturing hubs into 'fee for access' economies. Washington isn't offering real integration or mutually beneficial trade. Instead, it's monetising market access, demanding higher tariffs and mandatory purchases. This transactional model may score short-term wins for US negotiators, but it undermines the competitiveness and sovereignty of the Association of Southeast Asian Nations, tying the region into a rent-seeking system rather than a strategic partnership. Advertisement For starters, US tariffs on most Asean exports have risen dramatically, with access to the American market monetised under the guise of 'deals'. Even goods from Vietnam and Indonesia, which used to face most-favoured nation tariffs of 9.4 per cent and 8 per cent respectively on average, now attract more than double that.
South China Morning Post
9 hours ago
- South China Morning Post
Hong Kong to build more subsidised homes in I&T hub to meet middle-class demand
Hong Kong will build more subsidised homes in its new I&T hub near the border with mainland China to cater to the increasing needs of middle-class families and align with the city's strategy to attract top talent, the housing minister has said. Secretary for Housing Winnie Ho Wing-yin also outlined her plans to make public flats in the Northern Metropolis, where the San Tin Technopole innovation and technology (I&T) hub is located, more liveable by integrating them into nature and old villages. 'The technopole is a base camp for new productivity and industry. It is also a base camp for talent, whose requirements, income, affordability and standards for their children's education, among other things, will be higher,' she said on Wednesday last week. 'I think the proportion of subsidised sale homes would be adjusted higher to align with the area's position.' Hongkongers who fulfil asset and income requirements are able to apply for subsidised sale flats. The technopole is a flagship project in the Northern Metropolis, which aims to turn 30,000 hectares (74,132 acres) of land into an engine for economic growth and a housing hub with over 500,000 new flats, accommodating a population of about 2.5 million and around 650,000 jobs.
