Introduction | A global first, Hong Kong takes the lead in testing stablecoin Compliance regulation

In the past few years, the virtual currency market has experienced drastic fluctuations globally, transitioning from wild growth to strict regulation. As a bridge connecting digital assets with the real economy, the stability, Compliance, and application value of stablecoins have attracted significant attention.

In 2025, Hong Kong took the lead in laying out plans by officially passing the world’s first comprehensive regulatory bill for stablecoins, the “Stablecoin Ordinance,” which will take effect on August 1.

This means:

• Stablecoin issuance, circulation, and investment are fully included in the legal regulatory framework;
• Financial institutions and technology companies can launch stablecoin products under clear regulations;
• Ordinary people have the first opportunity to invest in and use stablecoins in a compliant, safe, and transparent environment.

The implementation of stablecoin policies is not only a strategic move for Hong Kong to solidify its position as a global digital financial hub, but it also opens up a new participation window for ordinary investors, cross-border coin demanders, and asset allocators.

I. Policy Overview | Comprehensive Interpretation of Hong Kong’s “Stablecoin Regulation”

Wide Coverage

• Issue stablecoins pegged to fiat currencies (HKD, USD, RMB, etc.) in Hong Kong;
• Stablecoins issued offshore, but pegged to the Hong Kong dollar or promoted to the public in Hong Kong.

Any involvement in the Hong Kong market or pegging to the Hong Kong dollar requires a license to eliminate regulatory arbitrage.

Regulatory Requirements are Strict

Three Pillars of the Regulatory Framework

1. Issuance Access

• Non-bank institutions require a paid-up capital of HKD 25 million (banks are exempt)
• Reserve assets must be 100% highly liquid assets such as cash/short-term government bonds.
• Key positions (CEO, CFO, etc.) must be based in Hong Kong

2. Technical Security

• Smart contracts must pass monthly audits by the Monetary Authority.
• The reserve fund address needs real-time on-chain monitoring (e.g., using Chainlink oracles)

3. Application Boundary

• Prohibition of Interest Payments: Avoid becoming a deposit-like product
• Cross-border promotion is restricted: “actively promoting” to the public in Hong Kong requires a license.

Sandbox Mechanism

3.1 The Hong Kong Monetary Authority has established a “regulatory sandbox” that allows certain institutions to test the issuance and application of stablecoins first, accumulate experience, and reduce market risks.

3.2 Participants

As of June 2025, there are:

• JD Coin Chain Technology (HKD stablecoin JD-HKD);
• Standard Chartered Bank + AN Group + Hong Kong Telecommunications (HKDG stablecoin)
• Roundcoin Innovative Technology (Hong Kong Dollar stablecoin HKDR);
• Ant Group (Ant International, Ant Digital Technology);
• Animoca Brands Limited

Note: Sandbox testing does not equal licensure; full licensing can only take effect after formal implementation.

2. Investment Dimension: Layout the Value Chain of Licensed Related Enterprises

(1) Equity Perspective of Sandbox Participants

(2) Hidden Value Assets

▶ Baishida Holdings (01168.HK)

• Unique advantages: Its subsidiary, ZhongAn Bank, has provided fiat custody for Standard Chartered and Yuan Coin, participating in the Hong Kong Monetary Authority’s “Ensemble Sandbox Program”.
• Undervalued: The current market capitalization is only HK$1.97 billion, which does not fully reflect its value as a stablecoin “Compliance channel”.
• Catalyst: If approved for stablecoin custody qualification, valuation or reassessment.

▶ Sifang Jingchuang (300468.SZ)

• Develop a stablecoin cross-border clearing system for HSBC and Standard Chartered
• Launch of the FINNOSafe platform to provide issuance and custody services.
• Technical cooperation orders increased by 230% year-on-year in Q1 2025

3. Application Revolution | Cross-border Payment and RWA Practical Guide

(1) Cross-border payment revolution: seconds-level arrival, cost plummeting

Liu Peng, CEO of JD Coin Chain Technology, disclosed for the first time during an interview with TECHHUB NEWS in May 2025 the three core application scenarios that the JD-HKD stablecoin is currently testing:

▶ Cross-border payment

• Traditional cross-border payments rely on the SWIFT system, with a fund arrival period of 2–4 days and fees as high as 1–3% of the transaction amount;
• JD-HKD stablecoin can reduce transfer time to seconds and lower costs by about 90%, greatly improving the efficiency of global capital flow;
• Focus on connecting high-frequency business scenarios such as cross-border e-commerce, supply chain payments, and B2B settlements.

▶ Investment Trading

• Working with a Hong Kong Compliance cryptocurrency exchange to support institutional and retail investors in conducting digital asset transactions;
• JD-HKD serves as a stable settlement tool pegged to the Hong Kong dollar, reducing trading volatility and enhancing asset circulation efficiency.

▶ Retail Payment

• Plan to connect JD’s Hong Kong and Macau stations, Southeast Asia business platform, and explore C-end payment scenarios;
• Consumers can directly use JD-HKD to pay for goods, eliminating the need for currency exchange and traditional payment intermediaries.

During a public sharing on June 17, Liu Qiangdong stated bluntly:

“After completing B-end cross-border payments, we will penetrate into C-end payments. In the future, everyone will be able to use JD stablecoin for payments while consuming globally.”

This means that stablecoins are not only efficiency tools for cross-border enterprises but are also expected to deeply penetrate the global consumer end, reshaping the traditional payment ecosystem.

(2) Real Asset Tokenization (RWA) Participation Path

Case

• Ant Group’s Jovay blockchain has completed a pilot for the tokenization of 320 million HKD in new energy charging pile revenue rights; investors can purchase yield-bearing stablecoins pegged to US treasury bonds through HashKey Exchange, with an annual yield of 4.2%.

Compliance points

• Mainland residents can legally exchange foreign currency using an annual personal foreign exchange quota of $50,000;
• It is strictly prohibited to use underground banks or gray capital channels to participate in investments.

4. Risk Defense: Identifying the Three Major Pitfalls

The daily trading volume of global stablecoins has surpassed 100 billion USD, and Hong Kong is reshaping the market with regulatory certainty, but caution is needed:

1. Some illegal stablecoin projects that are “hanging a sheep’s head to sell dog meat”;
2. Overseas promotional products that have not obtained a license from the Hong Kong Monetary Authority;
3. Funds flowing through non-standard financial channels.
4. Never use unregistered payment channels (underground money exchange rates <1% are a high-risk signal)
5. Unlicensed platforms claiming “high yield interest” are definitely scams (Hong Kong prohibits stablecoin interest payments)
6. Mainland bank cards do not involve any virtual currency transactions (to prevent accidental money laundering risk control)

V. Policy Window Period | Future Trends and Considerations

1. The first batch of licenses is scarce: It is expected that only a few leading institutions will be approved, and ordinary people can prioritize following the progress of projects such as JD.com, Ant Group, and Standard Chartered.

2. The Hong Kong stablecoin ecosystem is being fully reshaped:

• Form a multi-currency stablecoin matrix of Hong Kong Dollar, US Dollar, and offshore Renminbi;
• Applied to real scenarios such as cross-border payments, supply chain finance, and digital economy;
• Hong Kong’s status as an international financial center is further consolidated, attracting global capital and technology;
• Ordinary people can legally, compliantly, and with a low threshold participate in virtual asset opportunities significantly increased.

3. The prospects for offshore RMB are broad: it promotes the internationalization of the RMB, reduces foreign exchange risk, and is particularly beneficial for cross-border trade and asset allocation;

4. The cross-border payment revolution accelerates: the advantages of stablecoins in “payment is settlement” are obvious, and global cross-border capital flow will be reshaped;

5. Improvement of Judicial Compliance Model: Standardization and transparency of asset disposal in involved cases, enhancing the governance capability of virtual assets in mainland China;

6. Policy risks and market maturity need to be assessed with caution: the ecosystem is still in its early stages, and ordinary people should test the waters in batches and lay out their investments rationally.

6. The “Three Steps” for Ordinary People to Enter in Compliance

• Step 1: Policy Attention Follow up on the official implementation of the regulations on August 1 and the issuance of the first batch of licenses.
• Step 2: Account Preparation Open a Hong Kong bank account, a licensed exchange account, and complete KYC compliance;
• Step 3: Rational Experimentation Participate in stablecoin investment, payment, and asset allocation with a small amount, gradually familiarizing yourself with the ecological structure.

Tip: All operations must be carried out through Compliance channels. Please pay attention to platform qualifications, KYC certification, and AML rules. Do not participate in unlicensed products or high-risk investments.

Conclusion

The virtual asset market is moving from the gray area towards institutionalization and transparency:

The Hong Kong “Stablecoin Ordinance” opens a new compliance participation window for the general public;

Real needs such as investment, payment, and asset allocation can be safely realized on a Compliance platform.

With technology driving and policies supporting, stablecoins are expected to become the next financial infrastructure.

The policy dividend has arrived, and ordinary people can also enter in compliance, provided that you understand the rules.