AsianFin – Hong Kong’s Stablecoin Bill officially took effect today, marking a significant step in the city’s efforts to regulate virtual asset activities and promote financial innovation while maintaining monetary and financial stability.

The legislation establishes a licensing regime for fiat-referenced stablecoin (FRS) issuers operating in or from Hong Kong. Under the new rules, any entity issuing fiat-backed stablecoins in the course of business in Hong Kong—or issuing stablecoins claiming to be pegged to the Hong Kong dollar from overseas—must obtain a license from the Monetary Authority.

Licensed issuers are required to meet a range of regulatory standards, including robust reserve asset management, clear redemption mechanisms, proper segregation of client assets, and a sound stabilization structure. Issuers must also comply with anti-money laundering (AML), counter-terrorism financing (CTF), risk management, disclosure, auditing, and fit-and-proper requirements.

The Monetary Authority said it will conduct further consultations on the detailed supervisory requirements in due course.

The bill is part of Hong Kong’s broader effort to build a regulated environment for virtual assets, as the city seeks to position itself as a hub for compliant Web3 and digital finance development.