Hong Kong has formally brought its Stablecoin Ordinance into force and is now processing license applications for stablecoin issuers, a major milestone in the city’s efforts to regulate digital assets and strengthen its position as a global fintech hub. Officials also confirmed plans to present a comprehensive virtual asset regulatory framework to the Legislative Council later this year, and to implement automatic exchange of cross-border crypto tax informationstarting in 2028.
Stablecoin Licensing Regime Now Active
The Stablecoin Ordinance, passed by Hong Kong’s legislature in May 2025 and effective as of August 1, 2025, establishes a pioneering regulatory regime for fiat-referenced stablecoin issuers in Hong Kong. Under the new law, entities that issue stablecoins — either pegged to the Hong Kong dollar or other fiat currencies — must obtain a licence from the Hong Kong Monetary Authority (HKMA) to operate legally in the city.
Since the ordinance came into effect, the HKMA has been processing licence applications from potential issuers. This move represents one of the first comprehensive regulatory frameworks globally specifically targeting stablecoin issuance and operation, designed to bolster investor protection, ensure reserve asset backing, and elevate market integrity.
Industry infrastructure players have already begun adjusting to the new regime — for example, service providers such as FGA Trust have expanded custody capabilities to support future licensed stablecoin issuers under the new regulatory requirements.
Next Phase: Virtual Asset Regulatory Framework
In addition to the stablecoin licensing regime, Hong Kong officials have signalled that a broader regulatory frameworkfor virtual asset services — including trading, custody, advisory, and asset management — will be submitted to the Legislative Council this year (2026). The initiative is part of the government’s broader policy of strengthening oversight of digital asset markets while maintaining competitive conditions for innovation.
The proposed legislation aims to extend existing frameworks, such as the licensing of virtual asset trading platforms and custodial providers, with enhanced investor protection, anti-money-laundering standards, and risk management requirements. Public consultations on related proposals have already been conducted in late 2025 and early 2026.
Global Tax Transparency: Automatic Info Exchange by 2028
Hong Kong also plans to align its tax reporting system for digital assets with international standards. Under preliminary legislative proposals, the city intends to implement the Crypto-Asset Reporting Framework (CARF) based on the Organisation for Economic Co-operation and Development (OECD) standards. Once enacted, this framework will enable the automatic exchange of tax information on crypto-asset transactions with partner jurisdictions starting in 2028, reinforcing global tax cooperation and combating cross-border tax evasion.
Officials have said the legislative amendments necessary for this initiative will be introduced to the Legislative Council in 2026, as part of enhancements to Hong Kong’s existing tax reporting and automatic exchange standards.
Strategic Position in Global Crypto Regulation
Hong Kong’s move to regulate stablecoins and virtual assets comes as jurisdictions worldwide seek to balance innovation with market oversight. By establishing clear licensing requirements and aligning with internationally accepted reporting frameworks, Hong Kong is positioning itself as a leading global centre for digital asset finance and compliance.
Analysts say the city’s twin approach — rigorous licensing for stablecoin issuers and enhanced transparency through tax information exchange — could enhance investor confidence and attract institutional participation in the digital finance ecosystem.
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