Hong Kong Enacts HK$25M Stablecoin Rule to Attract Global Issuers

• Hong Kong introduces HK$25 million minimum capital requirement for stablecoin issuers under new regulatory framework.
• The move aims to enhance investor trust and secure Hong Kong’s position as a global leader in virtual assets.

Hong Kong has launched a landmark regulatory framework for stablecoin issuers, reinforcing its stance as a leading hub for virtual assets. Announced by the Hong Kong Monetary Authority (HKMA) and effective this year, the regulations set stringent conditions, including a minimum capital requirement of HK$25 million, to ensure market stability and investor protection.

The framework exclusively permits issuance of fiat-backed stablecoins with complete reserves. Issuers are mandated to provide a legal redemption mechanism, allowing stablecoin holders to exchange tokens for fiat currency at a 1:1 ratio within a short period. These measures are designed to prioritize stablecoin reliability and consumer usability.

To safeguard financial stability and withstand market shocks, stablecoin issuers must allocate HK$25 million in capital reserves. This requirement not only ensures the fulfillment of redemption obligations but also minimizes risks during turbulent market conditions. Additionally, collected funds must be invested in highly liquid, low-risk assets to guarantee adequate backing for the stablecoin's stored value.

A significant aspect of the new regime is its emphasis on transparency. Issuers are required to conduct independent audits and submit compliance documents to the HKMA. These audits will assess the quality of reserve assets and confirm alignment with public disclosures, thereby fostering greater market trust in Hong Kong’s virtual asset ecosystem.

Lui Chi-hung, a member of Hong Kong’s Stablecoin Review Tribunal, described the framework as a “clear institutional structure” for regulating virtual assets. He highlighted its potential to protect investors and attract international issuers, while also supporting the growth of Hong Kong’s Web3 ecosystem.

Globally, Hong Kong’s regulatory stance places it at the forefront of stablecoin oversight, offering an alternative to more ambiguous environments. As of November 21, 2025, Tether USDt (USDT) remains stable at $1 with a 0.10% increase in 24-hour trading volume, while PayPal USD (PYUSD) is priced at $0.999, reflecting a slight 0.009% decline. Meanwhile, USD Coin (USDC) and Dai (DAI) both trade at $1, with slight volume changes of 0.024% and -0.013%, respectively, showcasing the continued global reliance on stable and regulated digital currencies.