Interpretation of Hong Kong Stablecoin New Regulations: Retail Investor Guide and Comparison of Global Regulations

On August 1, 2025, the Hong Kong "Stablecoin Regulation" officially came into effect, becoming the world's first comprehensive regulatory framework for fiat stablecoins. This article provides an in-depth analysis of the regulatory policies of the Hong Kong Monetary Authority (HKMA), offering guidance for retail investors on the compliant holding of stablecoins, and comparing the regulatory differences between Hong Kong, Singapore, and the United States to explore market opportunities and challenges.

Core Points of Hong Kong's Stablecoin Regulation

The Hong Kong Monetary Authority has established a licensing system for fiat stablecoins through the "Stablecoin Regulation", aiming to balance innovation and risk management. Institutions issuing fiat stablecoins in Hong Kong or claiming to peg to the value of the Hong Kong dollar must apply for a license from the Monetary Authority and meet strict entry requirements. These requirements include a comprehensive risk management system, anti-money laundering (AML) and counter-terrorism financing (CFT) measures, as well as strong technological security capabilities. It is expected that initially only a few banks or fintech companies will be able to obtain a license.

The "stablecoin sandbox" program launched by the financial management authority supports testing of cross-border trade and Web3 application scenarios. Issuers must ensure that reserve assets are sufficient and stored in regulated custodians, while regularly publishing audit reports. Stablecoins are positioned as payment tools, initially focusing on cross-border trade applications to reduce retail investor risks. Regulators have also set a transition period, allowing market participants to adjust their businesses before the regulations come into effect to ensure compliance.

For retail investors, Hong Kong's regulatory policies will enhance market transparency and security, allowing them to participate in the digital economy through compliant stablecoins. However, retail investors need to be cautious in choosing licensed products.

How can retail investors legally hold stablecoins in Hong Kong?

Under the new regulations in Hong Kong, retail investors must follow the steps below to hold stablecoins in compliance:

1. Choose a licensed stablecoin: Prioritize holding stablecoins authorized by the financial management authority, as these stablecoins are usually pegged to the Hong Kong dollar or other major fiat currencies. Retail investors can check the list of issuers through the official website of the financial management authority or compliant exchanges.

2. Use compliant platforms: Trade through virtual asset trading platforms regulated by financial authorities to ensure the platform complies with KYC and AML requirements.

3. Focus on use and disclosure: Understand the specific uses of stablecoins (such as cross-border payments) and the issuer's reserve audit reports to ensure value stability.

4. Beware of cross-border risks: Pay attention to the technical and compliance challenges that may arise from differences in cross-chain technology or cross-border regulation.

Tip: Avoid investing in non-compliant stablecoins that claim "high returns" and prioritize those issued by transparent and regulated institutions.

Comparison of Stablecoin Regulation in Hong Kong, Singapore, and the United States

Hong Kong: The world's first comprehensive framework

The Hong Kong Monetary Authority's regulatory policies are relatively strict, emphasizing reserve transparency and AML compliance. It supports multi-currency stablecoins (such as those issued on the Ethereum and Solana networks), aimed at promoting the internationalization of the Renminbi and cross-border trade. This policy has attracted banks and tech giants to apply for licenses, with the potential to position Hong Kong as a digital financial hub in Asia.

Singapore: Balancing flexibility and prudence

The Monetary Authority of Singapore (MAS) launched a stablecoin framework in 2023, focusing on regulating stablecoins pegged to the Singapore dollar, requiring issuers to hold sufficient reserves of fiat currency. The policy is relatively flexible, attracting several global issuing institutions. The "Project Orchid" initiative tests payment and DeFi applications, with a high level of participation from retail investors.

USA: The market is mature but regulation is fragmented.

The United States has not yet implemented a unified stablecoin bill, but proposals such as the GENIUS Act are expected to make progress in 2025. Regulators require issuers to register as money service businesses (MSB) and disclose reserve asset conditions. USDT, USDC, and other stablecoins have the largest market size, but increasing conflicts between state and federal regulations have added uncertainty.

Retail investor insights: Hong Kong has strict regulations, high security but limited choices; Singapore is flexible and suitable for diversified investments; the U.S. market is mature but requires attention to regulatory risks.

Opportunities and Challenges for Retail Investors in Stablecoins

Opportunities:

• Hong Kong compliant stablecoins provide retail investors with safe investment options.
• The global stablecoin market is growing rapidly, and Hong Kong may see similar expansion.
• Multi-chain technology reduces transaction costs and enhances efficiency

Challenge:

• Hong Kong has high thresholds limiting the number of issuers, resulting in fewer choices for retail investors.
• Cross-border regulatory differences increase compliance complexity
• Technical vulnerabilities or poor reserve management may lead to value fluctuations

Conclusion: How Retail Investors Should Respond to New Regulations?

Hong Kong's "Stablecoin Ordinance" provides retail investors with a safe and regulated investment environment, but also demands a higher level of compliance awareness. Retail investors should choose stablecoins authorized by the financial management authority, trade through regulated platforms, and pay attention to the purpose and reserve transparency. Compared to the flexibility of Singapore and the maturity of the U.S. market, Hong Kong places more emphasis on financial stability and the internationalization of the Renminbi, making it suitable for conservative investment strategies.

Action Recommendations:

• Short-term: Focus on the list of the first batch of licensed issuers and choose compliant stablecoins.
• Medium term: Participate in cross-border trade or Web3 scenario applications
• Long-term: Track regulatory developments in Hong Kong, Singapore, and the United States, and optimize the investment portfolio.

Investing involves risks, and it is advisable to consult a professional advisor. This article is for reference only and does not constitute investment advice.