Hong Kong's legislature has approved a bill introducing a licensing framework for fiat-referenced stablecoin issuers. The move provides legal clarity and aims to enhance the city's position as a global digital asset hub.

Any issuer of stablecoins in Hong Kong or of HKD-backed stablecoins abroad must obtain a licence from the Hong Kong Monetary Authority. The law outlines standards for reserve asset management, redemption, and risk controls to protect investors and the wider public.

Officials say the legislation follows the principle of 'same activity, same risks, same regulation' and adopts a risk-based approach. Financial Secretary Christopher Hui stated that the measure sets a solid foundation for Hong Kong's growing virtual asset market.

The HKMA's sandbox programme for stablecoin issuers has already attracted three participants. The new ordinance is expected to take effect later this year.

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