Interpretation of the Hong Kong Stablecoin Bill: Clarifications of Misunderstandings, Regulatory Focus, and Development Prospects

Senior regulatory lawyer Wu Wenqian from Hong Kong provides an in-depth analysis of the newly enacted stablecoin legislation in Hong Kong, clarifying market misconceptions and discussing regulatory focal points and future developments.

Clarification of Major Misunderstandings

• Foreign stablecoins such as USDT and USDC do not need to apply for a license in Hong Kong and can still be traded OTC in Hong Kong.
• Regulations do not mandate KYC for all coin holders, but regulators prefer a closed-loop controllable model.
• The Monetary Authority cannot arbitrarily define licensed activities and must follow legal procedures.

Regulatory Focus and Challenges

• Whether retail investors can trade USDT/USDC remains a contentious issue.
• High application popularity but difficult to obtain approval, regulators are cautious in issuing licenses.
• Stablecoins need to find their positioning in compliant scenarios, making it difficult to compete directly with USDT/USDC.

Development Prospects and Impact

• Banks are actively laying out their plans, focusing on reserve asset management and business expansion opportunities.
• The Hong Kong dollar stablecoin may open up new avenues in compliant application scenarios.
• FATF assessment may lead to tighter regulations
• Web3 enthusiasm is warming up, but most projects are still in the planning stage.

Lawyer Wu believes that although Hong Kong's stablecoin policy is relatively conservative, the regulatory approach is more stable and coherent. The key to future development lies in finding unique application scenarios and developing in parallel with the traditional crypto ecosystem.