New regulations on stablecoins have been implemented, overview of the new policies in Hong Kong, the United States, and the three regions.

On August 1, 2025, Hong Kong's "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 policies of the Hong Kong Monetary Authority (HKMA), guiding 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.

Hong Kong "stablecoin regulation" key points

The Hong Kong Monetary Authority (HKMA) has established a licensing system for fiat stablecoins through the "Stablecoin Regulation" to balance innovation and risk. Any institution issuing fiat stablecoins in Hong Kong or claiming to peg the value to 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, as well as technical security capabilities. Initially, only a few banks or fintech companies are expected to be licensed. The HKMA's "stablecoin sandbox" program supports testing for cross-border trade and Web3 applications, with the first participants including JD.com Coin Chain Technology and Standard Chartered Bank. Issuers must ensure that reserve assets are sufficient, stored with regulated custodians, and regularly disclose audit reports. Stablecoins are positioned as payment tools, initially focusing on cross-border trade to reduce retail investor risks. Transitional arrangements allow market participants to adjust their businesses before the regulations take effect to ensure Compliance.

Significance for retail investors: The regulatory enhancement in Hong Kong improves market transparency and security, allowing retail investors to participate in the digital economy through compliant stablecoins, but they need to choose licensed products.

How can retail investors compliantly hold stablecoins in Hong Kong?

Retail investors need to follow the steps below to comply with the new regulations in Hong Kong for holding stablecoins:

• Choose licensed stablecoins: Prioritize holding stablecoins authorized by the Monetary Authority, pegged to the Hong Kong dollar or other major fiat currencies, and check the list of issuers on the Monetary Authority's official website or compliant exchanges.
• Use a Compliance platform: Trade through a virtual asset trading platform (VASP) regulated by the Monetary Authority, ensuring the platform meets 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 reports to ensure value stability.
• Beware of cross-border risks: Pay attention to the technical and Compliance challenges brought by cross-chain technology or differences in cross-border regulation.

Tip: Avoid investing in non-compliant stablecoins that claim "high returns" and prioritize 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's regulation is strict, emphasizing reserve transparency and AML Compliance, supporting multi-currency stablecoins (such as Ethereum and Solana networks), positioning itself for the internationalization of the renminbi and cross-border trade. The policy attracts banks and tech giants to apply for licenses, promoting Hong Kong as a digital financial hub in Asia.

Singapore: Balancing Flexibility and Prudence

The Monetary Authority of Singapore (MAS) launched a stablecoin framework in 2023, focusing on the regulation of stablecoins pegged to the Singapore dollar, requiring issuers to hold sufficient fiat reserves. The policy is flexible, attracting global issuers such as Paxos and Circle to test payment and DeFi applications through "Project Orchid," with high participation from retail investors.

United States: Market is mature but regulation is fragmented.

The United States has not yet unified its stablecoin legislation, but proposals such as the "GENIUS Act" are expected to make progress by 2025. Agencies like the SEC and CFTC require issuers to register as Money Services Businesses (MSB) and disclose reserve assets. USDT and USDC have the largest market sizes, but increasing conflicts between state and federal regulations add uncertainty.

Retail investor insights: Hong Kong has strict regulation, high safety but limited options; Singapore is flexible, suitable for diversified investments; the US market is mature but regulatory risks need attention.

Opportunities and Challenges for Retail Investors in Stablecoins

Opportunities: Hong Kong's compliant stablecoin provides retail investors with a safe investment option, the global stablecoin market is growing rapidly, and the US Treasury Secretary stated that it could increase the demand for $2 trillion in government bonds, with Hong Kong possibly experiencing similar expansion. Multi-chain technology reduces transaction costs and enhances efficiency.

Challenges: High thresholds in Hong Kong limit the number of issuers, resulting in fewer choices for retail investors; differences in cross-border regulation increase compliance complexity; technical vulnerabilities or poor reserve management may lead to value fluctuations.

Conclusion: How should retail investors respond to the new regulations?

The Hong Kong "Stablecoin Ordinance" provides a safe and regulated investment environment for retail investors, but requires a higher awareness of Compliance. Retail investors should choose stablecoins authorized by the Monetary Authority and trade on regulated platforms, paying attention to usage and reserve transparency. Compared to Singapore's flexibility and the maturity of the U.S. market, Hong Kong focuses on financial stability and the internationalization of the Renminbi, making it suitable for prudent investment.

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

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

Investing involves risks, please consult a professional advisor. This article is for information sharing only and does not constitute investment advice.