TechFlow, July 29 — The Hong Kong Monetary Authority announced that the Stablecoin Ordinance will take effect this Friday, with a six-month transition period. The authority stated it will implement a classified approach toward existing stablecoin issuers: those meeting regulatory requirements may obtain provisional licenses; those failing to meet standards within three months must wind down operations within four months; and those not meeting licensing criteria must cease operations within one month of receiving notice.
Regulatory requirements include full reserve backing, processing redemptions within one day, establishing a local entity in Hong Kong, and maintaining adequate financial resources. The HKMA emphasized that only a limited number of licenses will be issued initially, and issuers must implement compliance measures such as customer due diligence and transaction monitoring. Violators will face penalties including fines, license suspension, or revocation.
