Hong Kong's stablecoin regulatory policy sends a signal: innovation and safety are both necessary. How to build the guardrails

Hong Kong Financial Secretary Deputy Secretary-General Huang Wei Lun's latest statement indicates that Hong Kong's attitude towards stablecoins has shifted from observation to active promotion, while emphasizing the need to establish appropriate security safeguards. This “innovation and safety” balanced approach reflects Hong Kong's cautious yet open stance as an international financial center. Meanwhile, the Hong Kong government is also advancing the expansion of gold storage and clearing systems, aiming to build a more comprehensive financial infrastructure.

Hong Kong Stablecoin Regulation's “Seeking Stability and Precision” Strategy

Huang Wei Lun's emphasis on “seeking stability and precision” embodies two meanings: first, steady development; second, precise regulation. This is not a negation of stablecoin development but clarifies the prerequisites for promotion.

Core Policy Content

According to the latest news, the Hong Kong government will adopt the following strategies in promoting stablecoins:

• Ensure innovation capability in the financial market and expand the Hong Kong stock market
• Add safety barriers in stablecoin development
• Prevent stablecoins from being exploited by malicious actors
• Balance innovation with risk control

This expression indicates that Hong Kong is not simply banning or laissez-faire but aims to establish a regulatory framework that supports innovation while preventing risks.

Specific Meaning of “Safety Barriers”

Although the news brief does not specify detailed barrier measures, based on Hong Kong's financial regulatory experience, it may involve:

• Capital adequacy requirements for stablecoin issuers
• Independent audits and disclosures of reserve assets
• Licensing requirements and risk management for trading platforms
• Anti-money laundering and counter-terrorist financing compliance frameworks
• Consumer protection mechanisms

The common goal of these measures is to prevent stablecoins from becoming tools for illicit activities.

The Larger Picture of Hong Kong's Financial Strategy

Another highlight of this policy release is the synchronized expansion of the gold system. The Hong Kong government plans to increase gold storage capacity to 2,000 tons within three years and intends to put the central gold clearing system into operation this year.

This reflects Hong Kong's multi-dimensional financial strategy:

This combined approach indicates that Hong Kong is simultaneously advancing in digital assets and traditional precious metals, aiming to consolidate its status as an international financial center.

Personal Observations

From this policy release, Hong Kong's attitude towards stablecoins has shifted from “needs observation” to “active promotion with cautious management.” This is similar to approaches in Singapore, Switzerland, and other regions, which attract innovative projects while implementing strict regulation to prevent systemic risks.

The key question is: when will specific safety barrier measures be introduced, and whether these measures are sufficient to attract stablecoin projects to Hong Kong? If the barriers are too strict, they might increase compliance costs for enterprises and reduce attractiveness.

Summary

Hong Kong government's new stance on stablecoins can be summarized in three points:

1. Clear attitude: shifting from observation to proactive promotion, indicating recognition of stablecoin value
2. Balanced strategy: emphasizing “seeking stability and precision,” avoiding outright bans or laissez-faire approaches
3. Ecosystem enhancement: synchronized with the expansion of the gold system, reflecting a multi-dimensional financial strategy

The next critical step is to see when specific regulatory rules are implemented and whether these rules can genuinely attract international stablecoin projects. This will directly impact Hong Kong's competitiveness in the digital financial sector.