Hong Kong Opens Stablecoin Licensing as It Positions for Web3 Leadership

Hong Kong has taken a major leap toward becoming a digital asset hub with the passage of a new law regulating stablecoins.

The legislation, approved on May 21, lays the groundwork for licensed stablecoin issuers and reinforces the city’s ambition to lead in the evolving Web3 landscape.

Under the new framework, only fiat-backed stablecoins will be permitted, and licensing will be overseen by the Hong Kong Monetary Authority (HKMA). Applications for these licenses are expected to open before year-end, offering a clear pathway for global firms to enter the region’s regulated crypto market.

Legislator Johnny Ng, a strong proponent of Web3 development, described the bill as a foundational milestone and encouraged international companies to explore opportunities in Hong Kong. He noted that the next challenge lies in building real-world applications that demonstrate blockchain’s utility across payments, remittances, and digital commerce.

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Ng also voiced support for introducing interest-bearing stablecoins, saying yield could improve competitiveness, draw broader adoption, and contribute to long-term market growth. This view aligns with recent market shifts: yield-bearing stablecoins have surged to $11 billion in circulation—up from $1.5 billion at the start of 2024—now making up 4.5% of the stablecoin sector.

As crypto innovation accelerates globally, Hong Kong is betting that a strong regulatory foundation, coupled with an open-door approach to tech firms, will cement its role at the center of Asia’s digital economy.

Alexander Stefanov