← Regulations / Hong Kong / Operating Models / Stablecoin issuer

Stablecoin issuer / redeemer in Hong Kong

Issues a fiat-pegged stablecoin to the public, operates redemption, and holds reserves backing the float.

Conditional AI-Generated · Unreviewed

Stablecoin issuer is conditionally permitted in Hong Kong with a local entity, subject to AML obligations and high licensing burden.

Verdict Details

Permitted
conditional
Local entity required
Yes
Licensing burden
High
Last updated
2026-07-13

AML Obligations

  • Licensed under the Stablecoins Ordinance (Cap. 656) — HKMA-regulated — full AML/CTF compliance under AMLO Part 5B (Cap. 615) applies
  • Suspicious transaction reporting to the Joint Financial Intelligence Unit (JFIU)
  • Ongoing compliance audits under AML Ordinance
  • KYC/CDD obligations for all issuers/redemption counterparties
  • Financial audits under Companies Ordinance (Cap. 622) using IFRS/ISA standards

Key Restrictions

  • Must be licensed by HKMA under the Stablecoins Ordinance (Cap. 656) — effective August 1, 2025
  • FRS issued in Hong Kong or pegged to HKD requires an HKMA license; marketing restrictions apply
  • Reserve composition, segregation, and audit rules will be prescribed by HKMA under the Stablecoins Ordinance (fact IDs do not detail exact reserve percentages, but licensing is mandatory)
  • Foreign-issued stablecoins face marketing/distribution restrictions — likely require HKMA authorization to be offered to Hong Kong public
  • VATP license (SFC) may be additionally required if stablecoins are traded on a platform; SFO Type 1/7 may apply if stablecoin is classified as a security token
  • Minimum paid-up capital for VATP license is HKD 5M (~$640K USD); stablecoin issuer capital requirements under Stablecoins Ordinance are not yet detailed in provided facts

Key Risks

  • Stablecoins Ordinance (Cap. 656) is only effective August 1, 2025 — regulatory uncertainty in interim period
  • Reserve composition and audit specifics not yet finalised in provided facts — regulatory ambiguity until HKMA publishes detailed rules
  • Foreign stablecoin issuers (e.g., Tether USDT) may face restricted access to HK market without local HKMA license
  • Intersection of SFC (VATP) and HKMA (stablecoin) licensing regimes creates dual-regulatory exposure
  • Tax treatment of stablecoin issuance under profits tax (16.5%) is untested in IRD guidance

Evidence

This verdict synthesizes the following facts. Each fact links to its primary source(s).

stablecoin 92% confidence

The HKMA licenses fiat-referenced stablecoin (FRS) issuers under the Stablecoins Ordinance (Cap. 656), in force since 1 August 2025: a licence is required to issue an FRS in Hong Kong or an HKD-referenced FRS in or outside Hong Kong, only licensed FRS may be offered to retail investors or advertised, and the first two licences (Anchorpoint Financial, FRS01; HSBC, FRS02) took effect on 10 April 2026 out of 36 applications.

[primary] HKMA — Stablecoin issuers [primary] HKMA press release: passage of the Stablecoins Bill (21 May 2025) [primary] HKMA press release: Granting of stablecoin issuer licences (10 Apr 2026)
stablecoin 88% confidence

The SFC licenses virtual asset trading platforms under the AMLO (Cap. 615, Part 5B) from 1 June 2023 and security-token activity under the SFO (Cap. 571); under its circular of 27 May 2026 (26EC26), VATPs and licensed corporations may offer stablecoins issued by an HKMA licensee under the Stablecoins Ordinance after prior written notification to the SFC rather than prior approval.

[primary] SFC circular on transitional arrangements of the new licensing regime for VATPs (31 May 2023, 23EC27) [primary] SFC circular on provision of Relevant Stablecoin service by VATPs and licensed corporations (27 May 2026, 26EC26) [primary] SFC circular on expansion of products and services of VATPs (3 Nov 2025, 25EC57)
licensing 95% confidence

Stablecoins Ordinance (Cap. 656): passed by the Legislative Council on 21 May 2025 and in effect since 1 August 2025. Issuing a fiat-referenced stablecoin in Hong Kong, or a Hong Kong dollar-referenced one in or outside Hong Kong, requires an HKMA licence. The first licences, to Anchorpoint Financial Limited (FRS01) and HSBC (FRS02), took effect on 10 April 2026.

[primary] Government welcomes passage of the Stablecoins Bill (21 May 2025) [primary] HKMA — Stablecoin issuers [primary] HKMA Register of licensed stablecoin issuers (last revision 23 Apr 2026)
licensing 90% confidence

AMLO (Cap. 615) Part 5B, inserted by the AMLO (Amendment) Ordinance 2022 (Ord. No. 15 of 2022, gazetted 16 December 2022), introduced mandatory SFC licensing of centralised virtual asset trading platforms from 1 June 2023; licensed platforms may serve both professional and retail investors, subject to SFC token-admission and investor-protection requirements.

[primary] SFC circular: AMLO (Amendment) Ordinance 2022 (16 Dec 2022, 22EC71) [primary] SFC circular on transitional arrangements of the new licensing regime for VATPs (31 May 2023, 23EC27) [primary] SFC Guidelines for Virtual Asset Trading Platform Operators (June 2023)
licensing 90% confidence

HKMA — licenses fiat-referenced stablecoin issuers under the Stablecoins Ordinance (Cap. 656, in effect 1 August 2025; first two licences 10 April 2026), supervises banks, runs the Fintech Supervisory Sandbox

[primary] HKMA — Stablecoin issuers [primary] HKMA Register of licensed stablecoin issuers (last revision 23 Apr 2026) [primary] HKMA — Fintech Supervisory Sandbox (FSS)
licensing 90% confidence

SFC — licenses VA trading platforms under AMLO Part 5B (13 licensed as of 12 October 2026) and SFO Types 1/7 for security tokens; supervision and enforcement

[primary] SFC — Lists of virtual asset trading platforms (last update 12 Oct 2026) [primary] SFC circular on transitional arrangements of the new licensing regime for VATPs (31 May 2023, 23EC27) [primary] SFC adopts new approach to virtual asset trading platforms (6 Nov 2019, 19PR105)
licensing 95% confidence

JFIU — Joint Financial Intelligence Unit — suspicious transaction reports

[primary] About the JFIU
licensing 90% confidence

A VATP licence from the SFC under AMLO Part 5B has been mandatory since 1 June 2023. The SFC VATP Guidelines require paid-up share capital of at least HK$5,000,000 and liquid capital of at least the higher of HK$3,000,000 and the Financial Resources Rules basic amount (paras 6.2-6.3), storage of 98% of client virtual assets in cold storage (para 10.6(c)), and large-cap index tests for retail-tradable tokens (para 7.8). The SFC list shows OSL Exchange (licensed 15/12/2020) and HashKey Exchange (09/11/2022) as the earliest licensed platforms; 13 were licensed on 12 Oct 2026.

[primary] SFC Guidelines for Virtual Asset Trading Platform Operators (June 2023) [primary] SFC — Lists of virtual asset trading platforms (last update 12 Oct 2026)
licensing 85% confidence

Under the SFC Guidelines for Virtual Asset Trading Platform Operators (June 2023), a licensed platform operator must hold client assets on trust through a wholly owned Associated Entity (para 10.1), store 98% of client virtual assets in cold storage (para 10.6(c)), and keep an SFC-approved compensation arrangement covering 50% of client VAs in cold storage and 100% in hot and other storage (para 10.22). A separate licensing regime for VA custodians outside trading platforms is a proposal (FSTB/SFC conclusions of 24 Dec 2025), not yet law.

[primary] SFC Guidelines for Virtual Asset Trading Platform Operators (June 2023) [primary] FSTB and SFC conclude consultations on VA dealer and custodian regimes (24 Dec 2025, 25PR210)
licensing 80% confidence

Companies Ordinance (Cap. 622): Mandates annual audits for most companies.

[secondary] hkicpa.org.hk [secondary] sfc.hk [secondary] icac.org.hk
licensing 80% confidence

IFRS/ISA Standards: Auditors must follow International Financial Reporting Standards (IFRS) and International Standards on Auditing (ISA).

[secondary] hkicpa.org.hk [secondary] sfc.hk [secondary] icac.org.hk
licensing 80% confidence

Anti-Money Laundering (AML) Ordinance: Audits may check compliance with financial crime prevention.

[secondary] hkicpa.org.hk [secondary] sfc.hk [secondary] icac.org.hk

Evidence fact hk.tax not found (may have been renamed).

Verdict Attribution

Source:
AI-Generated · Unreviewed
AI synthesized:
2026-07-13 (deepseek-chat)
Last updated:
2026-07-13
Confidence:
medium

This verdict was produced by an AI model from the underlying facts. Confirm with counsel before relying on it for material decisions.

Conditional — fiat-referenced stablecoin issuance in/into Hong Kong requires an HKMA license under the Stablecoins Ordinance (Cap. 656, effective Aug 1, 2025), with additional SFC licensing obligations if the stablecoin is traded or marketed through VASPs; reserve composition and audit rules are mandated but detail is pending; foreign-issued stablecoins face marketing restrictions and likely require local HKMA authorization.

Questions this verdict aims to answer

  • What e-money or banking license is required to issue?
  • What reserve composition, segregation, and audit rules apply?
  • What redemption rights must be granted to holders?
  • Are foreign-issued stablecoins permitted for use locally?