Hong Kong passes Stablecoin Bill, paving way for licensed stablecoin issuance and global blockchain growth - IcoHolder.

In a landmark move for the crypto industry, Hong Kong’s Legislative Council has passed the Stablecoin Bill in its third reading, officially establishing a regulatory framework for the issuance of stablecoins. The legislation allows licensed institutions to begin applying for stablecoin permits from the Hong Kong Monetary Authority (HKMA) later this year, with full implementation set for 2025.

Only stablecoins backed by legal tender will qualify under the new law, a stipulation designed to enhance transparency, protect consumers, and bring digital assets in line with established financial norms. The bill signals Hong Kong’s strategic intent to become a global leader in blockchain and Web3 technologies.

Johnny Ng Kit-chong, a Legislative Council member and prominent advocate for crypto innovation, welcomed the bill’s passage, calling it a defining step toward establishing Hong Kong as an international Web3 hub. He encouraged global fintech and crypto companies to seek licensing and take part in shaping the city’s blockchain economy.

Ng stressed that licensing is only the beginning of a broader roadmap. He outlined potential uses for stablecoins in retail payments, cross-border trade, and peer-to-peer transactions. He also proposed distributing interest earnings to stablecoin holders to boost adoption and ensure long-term growth and competitiveness.

Globally, the stablecoin market has grown to a market capitalization of $247.36 billion, with a daily trading volume exceeding $81 billion. Tether (USDT) remains the largest player, followed by USD Coin (USDC), and other notable entrants like USDS, Ethena USDe, and DAI.

With this legislative framework, Hong Kong positions itself as a crucial bridge between traditional finance and the evolving world of digital assets. The move is expected to attract institutional investors and foster a more secure and trusted environment for stablecoin development on a global scale.