Hong Kong passed stablecoins bill to regulate issuers

Hong Kong has passed the Stablecoins Bill to establish a licensing system for fiat-referenced stablecoin issuers on Wednesday.
This move aims to strengthen oversight of virtual asset activities, promote financial stability, and encourage innovation, according to a government release.
Under the new law, anyone issuing an FRS in Hong Kong—or referencing the Hong Kong dollar—must obtain a license from the Hong Kong Monetary Authority.
Issuers must meet standards on reserve management, client asset separation, redemption processes, and maintain a stable value mechanism. 
They must also comply with rules on anti-money laundering, risk management, disclosures, and audits.
Secretary for Financial Services and the Treasury Christopher Hui Ching-yu said the law applies consistent rules based on risk, aligning with global standards while supporting industry growth and investor protection. 
HKMA chief executive Eddie Yue Wai-man said that the law provides a flexible, practical framework to support the stablecoin and wider digital asset market.
The new law is set to take effect later this year.
STAFF REPORTER