Hong Kong tightens regulation on stablecoins, promoting the trend of de-dollarization.

Hong Kong reaffirms support for stablecoins as it prepares to implement a licensing framework for stablecoin issuers pegged to fiat currency starting from August 1. Financial Secretary Paul Chan stated that stablecoins are a cost-saving option, particularly suitable for the trend of cross-border transactions in local currencies in South Hemisphere countries and Asia.

The new law requires organizations to maintain reserves in Hong Kong, separate assets, comply with AML, and only allow licensed organizations to issue stablecoins for individual investors. Analysts believe this regulation is stricter than Singapore's and may hinder the direct participation of big players like Circle or Tether.

This move aligns with China's de-dollarization strategy and Hong Kong's role as the world's largest CNH ( trading hub. Although the costs are not yet truly competitive with existing systems like Wise, experts expect that the transaction costs of stablecoins will gradually decrease in the future.