Hong Kong to Roll Out Stablecoin Law, Expand Web3 Regulations in 2025

• Hong Kong will pass stablecoin legislation and introduce related licenses within the year.
• New rules will cover OTC virtual asset trading and custodial services.

Hong Kong will soon pass stablecoin legislation and establish licensing rules for over-the-counter (OTC) transactions and digital asset custody services. Financial Secretary Paul Chan announced the plans during the Hong Kong Web3 Festival on Monday, signaling the city’s ongoing push to refine its Web3 policy.

The new legislative framework will include compliance licenses for OTC and custodial businesses. Additionally, licensed spot exchange-traded funds (ETFs) will gain permission to offer staking services. Hong Kong will also explore legislative steps for token issuance by different market entities.

Hong Kong Tightens Web3 Laws

Later this year, the government will release a second policy statement on virtual asset development. This builds on its first statement from October 2022, which outlined a high-level virtual asset roadmap. The upcoming update will focus on using Web3 technologies to support traditional finance, bolster the real economy, and enhance digital asset applications.

Chan emphasized the need to create a balanced environment. He said the regulatory framework should enable innovation while protecting market integrity. Hong Kong’s approach continues to support growth without compromising stability.

So far, the Securities and Futures Commission has granted licenses to ten virtual asset trading platforms. At the same time, the city has become the largest virtual asset ETF market in the Asia-Pacific region. The planned stablecoin regulations will strengthen this progress, with a licensing regime expected before year-end.

Meanwhile, the government is conducting consultations on regulating OTC trading and custodial services. These steps aim to expand oversight and ensure consistent rules across the virtual asset sector.

Chan stressed that regulation alone is not enough. He highlighted the importance of collaboration among governments, regulators, and private stakeholders. This multi-stakeholder approach will help drive sustainable Web3 development across borders.

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