Hong Kong to Ban Unlicensed Stablecoin Promotions Starting August 1

Highlights:

• Hong Kong will ban unlicensed stablecoin promotions to protect retail users starting August 1 under new rules.
• Most stablecoin applicants in Hong Kong lack clear plans, as only a few licenses will be granted in the first phase.
• The new stablecoin law sets strict backing rules and limits public access to tokens from licensed firms only.

The Hong Kong Monetary Authority will begin enforcing new restrictions on stablecoin promotions starting August 1. Hong Kong is set to ban promotions on stablecoins that are not regulated by the body. The Stablecoins Ordinance, passed in May, will prohibit public offers of fiat-referenced stablecoins without a license. This new rule applies to any individual or company seeking to issue fiat-backed tokens to retail users in the city.

#BREAKING

Hong Kong Monetary Authority: From August 1, it is illegal to promote any unlicensed stablecoin to the public

Yu Weiwen, Chief Executive of the Hong Kong Monetary Authority, warned that there have been recent frauds using the promotion of digital assets and stablec…

— Bpay News (@bpaynews) July 24, 2025

Eddie Yue, the chief executive of the Hong Kong Monetary Authority, issued a warning in a recent blog post. He urged the public to avoid engaging with any unlicensed stablecoin promotions. He noted that some recent campaigns came close to manipulation and could mislead retail investors. Yue added that excessive excitement in the market has created frothy conditions that require attention.

Only licensed parties will be allowed to advertise or provide the stablecoins to the general population, according to the law. Unlicensed activities involving stablecoins will be illegal once the law comes into effect. Yue encouraged users to remain alert and avoid taking part in activities that may break the new rules.

Authorities in the country aim to cool down the growing speculation in the market. They want to ensure that stablecoin adoption occurs within a secure and controlled environment.

Firms Rush to Apply Without Being Ready for Licensing Framework

Over 40 companies have contacted the Hong Kong Monetary Authority to negotiate plans surrounding stablecoins. These companies are large players like Ant Group and JD.com. A number of applicants have also started preparing, but many are still at an early development stage. Meanwhile, the passage of the GENIUS Act has put pressure on China to act. According to an executive at Animoca, the country is positioning Hong Kong as a pilot zone.

Interesting: China's stablecoin agenda gets a boost as U.S. heat drives Beijing to accelerate development, quietly reversing its earlier concerns about risks to stem dollar-pegged token growth in Asia #stablecoins #cr…#Blockchain #CryptoNews #USHeat #Pushing #US #Heat #Crypto

— Arsh (@arsh_thinks) July 24, 2025

Eddie Yue, however, felt that many applicants were not prepared. According to him, most of the proposals are still conceptual without clear strategies or risk management frameworks. While firms express interest in areas like cross-border payments and digital finance, many fail to provide practical application scenarios.

Law firms within the region also reported increased interest in licensing stablecoins by their clients. Other businesses have expressed interest in applying and are still in the process of completing their applications. Such applications are likely to occur once the law takes effect.

The authority made it clear that only a few licenses will be issued during the first phase. Yue warned that listed firms with no actual stablecoin operations have seen share prices and volumes rise after making announcements. He said that the public should avoid reacting to such headlines and instead make decisions based on facts.

Hong Kong Stablecoin Ban Sets Strict Reserve Rules and Investor Access Limits

The new act mandates the full backing of all stablecoins by high-quality and liquid reserves. Licensed issuers must keep these reserves in trust and separate them from business assets to protect them from creditor claims during insolvency.

Only licensed firms can offer stablecoins to retail users. Those without a license can only make their tokens available to professional investors. The Hong Kong Monetary Authority will not permit public access to stablecoins issued by unlicensed entities. Officials plan to release updated guidance by the end of July. These updates will include requirements focused on anti-money laundering safeguards.