From August 1st, Hong Kong will criminalize unauthorized stablecoin promotion, a strict move aimed at curbing speculation and protecting individual investors.
From August 1st, 2025, Hong Kong will officially implement one of the strictest legal frameworks for stablecoins. Accordingly, any act of providing or promoting stablecoins pegged to legal tender without a valid license will be considered a criminal offense.
Violators will face fines up to 50,000 Hong Kong dollars (approximately 6,300 USD) and potentially imprisonment for up to six months, demonstrating the government's determination to strictly control the digital asset market.
The Hong Kong Monetary Authority (HKMA), the region's central bank, has issued a clear warning, calling on investors to avoid unlicensed stablecoin projects to prevent legal violations. HKMA's Managing Director, Mr. Eddie Yue, emphasized that the new regulation aims to enhance transparency and protect investors from fraud risks.
Mr. Yue explained that implementing strict measures is necessary due to irrational speculation in the market caused by unfounded stablecoin statements, which have led to significant stock price increases for related companies. For example, Guotai Junan's stock price once rose by 300% after the company's banking license was expanded to digital assets. "Decisive action is needed to suppress this excessive speculative sentiment," Mr. Yue affirmed.
Although around 50 companies have submitted license applications, HKMA remains cautious. Mr. Yue noted that most proposals lack practicality, are theoretical, and lack specific implementation plans. Many companies have not even demonstrated the necessary financial risk management or technical capabilities to issue and operate a stablecoin. Therefore, he emphasized that in the initial phase, "only a few licenses will be granted" and most entities should not expect approval.
Compared to other legal jurisdictions, Hong Kong's approach stands out for its high level of strictness. While the European Union (EU) applies large financial penalties under the MiCA regulation without imprisonment, the United Kingdom's regulatory authorities are still struggling with stablecoin regulation implementation.
