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Hong Kong’s Approach to Stablecoins Connects Cryptocurrency with Practical Applications

Hong Kong’s Approach to Stablecoins Connects Cryptocurrency with Practical Applications

Bitget-RWA2025/11/03 03:46
By: Bitget-RWA
- Hong Kong's HKMA demands stablecoin issuers prove "strong use cases" for licensing, prioritizing real-world utility over speculation. - Stock Exchange rejects DAT conversions for listed firms, citing investor protection risks and regulatory gaps in crypto structures. - Ant Group, JD.com, and Fosun file trademarks in Hong Kong, leveraging its bank-grade stablecoin rules and licensing clarity. - Hong Kong's framework mandates full collateralization and redemption mechanisms to tie stablecoins to economic a

Hong Kong’s financial watchdog has indicated it will take a tough stance on stablecoin licensing, requiring issuers to prove a “clear and substantial use case” before approval is granted, according to Hong Kong Monetary Authority (HKMA) chief Eddie Yue. This represents a significant change in the city’s approach as it seeks to become a leading global center for digital assets, balancing innovation with risk management, as reported by a

.

The HKMA’s position is consistent with wider regulatory efforts to limit speculative activities in the cryptocurrency sector. At least five publicly traded companies have had their applications to become digital asset treasury (DAT) entities turned down by the Hong Kong Stock Exchange, which cited investor protection and regulatory uncertainty as reasons, according to a

. The exchange has also barred listed companies from converting into solely crypto-holding businesses, reflecting a prudent stance on market stability, as noted by Cryptopolitan.

Hong Kong’s Approach to Stablecoins Connects Cryptocurrency with Practical Applications image 0

Under Hong Kong’s regulatory regime, which began on August 1, 2025, stablecoin issuers are required to obtain licenses from the HKMA and comply with strict reserve standards, including full collateral backing and strong redemption processes, as outlined in a

. The goal of these rules is to ensure stablecoins are anchored to genuine economic activity rather than speculative trading. “Hong Kong wants to avoid risky cycles where companies simply raise funds, accumulate tokens, inflate their value, and then seek more capital,” said Gu Ronghui, a former member of Hong Kong’s Web3 task force and advisor to Singapore’s Monetary Authority, according to a .

This proactive regulatory approach has already attracted major industry players. Ant Group, the company behind Alipay, has recently applied for trademarks for “ANTCOIN” in Hong Kong, indicating preparations for possible stablecoin launches under the new rules, according to a

. JD.com and Fosun International have also filed trademarks and participated in policy discussions, highlighting the increasing interest in Hong Kong’s regulated environment, Coinotag reported.

Hong Kong’s clear regulatory framework has given it an advantage over Singapore, its traditional competitor in Asia’s digital asset sector. Over the last two years, many Web3 companies have moved their headquarters to Hong Kong, attracted by its robust stablecoin regulations and licensing options for virtual asset platforms, as noted by Yahoo Finance. The city’s strong capital markets and access to tech talent from mainland China further enhance its attractiveness.

Nonetheless, there are still hurdles. The lack of specific laws for DAT structures has left both regulators and market participants operating in a legal gray zone. Huang Tianyou, chairman of the China Securities Regulatory Commission (CSRC), cautioned that DAT premiums could “disappear overnight” if regulatory clarity is achieved, stressing the importance of investor education, according to CoinEdition. He also pointed out that most local investors are unfamiliar with DATs, which could increase market instability, as reported by Cryptopolitan.

As Hong Kong continues to refine its policies, the emphasis on innovation driven by real-world use cases remains central. Eddie Yue’s remarks highlight a broader plan to connect digital assets with traditional finance, ensuring they are used for practical purposes like cross-border payments and trade, rather than for speculation, as observed by Cryptopolitan. This strategy is in line with global developments, where stablecoins are increasingly viewed as tools for financial access and efficiency, not just for trading, according to Yahoo Finance.

The regulatory environment is still evolving. With the first licensed stablecoins expected as soon as 2026, Hong Kong’s ability to maintain a balance between innovation and oversight will be crucial in determining its position in the worldwide digital asset landscape, Yahoo Finance concluded.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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