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Hong Kong passes stablecoin bill, set to open licensing by year-end

As a researcher delving into the realm of digital assets and Web3 innovation, I find myself invigorated by the recent passing of the Stablecoin Bill in Hong Kong’s Legislative Council. This progressive move sets the stage for a regulated environment that could catapult this region to global prominence as a leader in the development and management of digital assets.

On May 21st, Legislative Council member Johnny Ng Kit-Chong stated that the bill had successfully navigated its final stage of debate, marking the removal of the last obstacle before it could be officially adopted.

According to Ng, it’s anticipated that significant organizations might be eligible to submit applications to the Hong Kong Monetary Authority towards the close of this year, seeking permission to issue stablecoins.

As per the latest laws in Hong Kong, stablecoins should have traditional currencies like the US dollar or euro as their underlying assets. Ng has expressed that Hong Kong is open to global businesses and institutions planning to issue stablecoins, inviting them to apply in Hong Kong. He also offers to facilitate connections and collaborations personally.

“I am also happy to facilitate connections and collaborate with all stakeholders to advance the development of Web3 in Asia and globally, with Hong Kong at the center.“

Hong Kong aims to become a Web3 powerhouse

According to Ng, this law signifies the initial phase in constructing Web3 infrastructure within Hong Kong. However, he emphasizes that the key move lies in creating more practical applications for it.

In other words, Ng mentioned that the use of stablecoins could spur advancements in everyday payment systems, international commerce, and person-to-person transfers.

In his statement, he emphasized his support for the advancement and use of stablecoins, as they symbolize a significant financial breakthrough. To improve market stability, he proposed that interest income be distributed among stablecoin owners.

Interest for stablecoin holders

In the opinion of Ng, offering interest on stablecoins can boost their competitive edge. This enhanced competition encourages wider engagement and increases the market share of stablecoins, thereby fostering what he considers to be lasting development.

According to Ng’s observations, yield-generating stablecoins have become more competitive due to recent encouraging data. It is noted that the circulation of these stablecoins has grown significantly, reaching approximately $11 billion, which accounts for 4.5% of the entire stablecoin market. This represents a substantial increase from the initial figure of $1.5 billion and a 1% market share at the beginning of 2024.

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2025-05-21 16:43