Interpretation of the new Hong Kong stablecoin regulation in 2025: How can retail investors hold stablecoins in compliance? Comparison of policies in Hong Kong, Singapore and the United States

On August 1, 2025, the Hong Kong Stablecoin Ordinance officially came into effect, marking the implementation of the world's first comprehensive regulatory framework for fiat stablecoins. This article interprets the regulatory policy of the Hong Kong Monetary Authority (HKMA), guides retail investors on how to hold stablecoins in compliance, and compares the regulatory differences between Hong Kong, Singapore and the United States, revealing market opportunities and challenges.

Key points of Hong Kong’s Stablecoin Ordinance

The Hong Kong Monetary Authority has established a licensing system for fiat stablecoins through the Stablecoin Ordinance to balance innovation and risk. Any institution that issues fiat stablecoins in Hong Kong or claims to be anchored to the value of the Hong Kong dollar must apply for a license from the HKMA and meet strict entry requirements, such as sound risk management, anti-money laundering (AML) and counter-terrorist financing (CFT) measures, and technical security capabilities. It is expected that only a few banks or fintech companies will be able to obtain licenses in the early stage. The HKMA's "Stablecoin Sandbox" program supports testing cross-border trade and Web3 applications. The first batch of participants include JD CoinChain Technology and Standard Chartered Bank. Issuers must ensure that reserve assets are sufficient and deposited in regulated custodians, and disclose audit reports regularly. Stablecoins are positioned as payment tools, focusing on cross-border trade in the early stage to reduce retail investment risks. The transitional arrangement allows market entities to adjust their businesses before taking effect to ensure compliance.

What it means for retail investors: Hong Kong’s regulation improves market transparency and security. Retail investors can participate in the digital economy through compliant stablecoins, but they must choose licensed products.

How can retail investors hold Hong Kong stablecoins in compliance with regulations?

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

• Choose licensed stablecoins: Prioritize stablecoins authorized by the HKMA, which are anchored to the Hong Kong dollar or other major legal currencies. The list of issuers can be found on the HKMA’s official website or compliant exchanges.

• Use compliant platforms: Trade through virtual asset trading platforms (VASPs) regulated by the HKMA to ensure that the platform complies with KYC and AML requirements.

• Focus on usage and disclosure: Understand the usage of stablecoins (such as cross-border payments) and the issuer’s reserve audit report to ensure value stability.

• Be wary of cross-border risks: Pay attention to the technical and compliance challenges brought about by cross-chain technology or cross-border regulatory differences.

Tip: Avoid investing in non-compliant stablecoins that claim to have “high returns” and give priority to transparent, regulated issuers.

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 has strict supervision, emphasizes reserve transparency and AML compliance, supports multi-currency stablecoins (such as Ethereum and Solana network), and is positioned for RMB internationalization and cross-border trade. The policy attracts banks and technology giants to apply for licenses, promoting Hong Kong to become Asia's digital financial center.

Singapore: Flexibility and prudence

The Monetary Authority of Singapore (MAS) will launch a stablecoin framework in 2023, focusing on regulating stablecoins anchored to the Singapore dollar and requiring issuers to hold sufficient legal currency reserves. The flexible policy has attracted global issuers such as Paxos and Circle to test payment and DeFi applications through "Project Orchid", with high retail investor participation.

US: Mature market but fragmented regulation

The United States has not yet unified the stablecoin bill, but proposals such as the GENIUS Act are expected to make progress in 2025. The SEC, CFTC and other agencies require issuers to register as money service businesses (MSBs) and disclose reserve assets. USDT and USDC have the largest market size, but conflicts between state and federal regulation increase uncertainty.

Tips for retail investors: Hong Kong has strict regulations and high security but limited choices; Singapore is flexible and suitable for diversified investments; the US market is mature but regulatory risks need attention.

Opportunities and challenges for retail investors investing in stablecoins

Opportunities: Hong Kong's compliant stablecoins provide retail investors with safe investment options. The global stablecoin market is growing rapidly. The US Treasury Secretary said that the demand for US$2 trillion in treasury bonds could be increased, and Hong Kong may see similar expansion. Multi-chain technology reduces transaction costs and improves efficiency.

Challenges: Hong Kong’s high threshold limits the number of issuers, leaving few options for retail investors; cross-border regulatory differences increase compliance complexity; technical loopholes or poor reserve management may lead to value fluctuations.

Conclusion: How should retail investors deal with the new regulations?

The Hong Kong Stablecoin Ordinance provides a safe and regulated investment environment for retail investors, but requires a higher level of compliance awareness. Retail investors should choose stablecoins authorized by the HKMA, trade through regulated platforms, and pay attention to the transparency of usage and reserves. Compared with Singapore's flexibility and the mature market of the United States, Hong Kong focuses on financial stability and the internationalization of the RMB, and is suitable for steady investment.

Action suggestions: In the short term, pay attention to the list of the first batch of licensed issuers and choose compliant stablecoins; in the medium term, participate in cross-border trade or Web3 scenarios; in the long term, track regulatory developments in Hong Kong, Singapore, and the United States and optimize the investment portfolio.

Keywords: Hong Kong stablecoin regulation, HKMA framework, retail compliance, stablecoin investment, Singapore stablecoin, US stablecoin, cross-border trade, RMB internationalization

Investment involves risks, please consult a professional advisor. This article is for information sharing only, not investment advice.