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ARTICLE · 16 OCTOBER 2025

Market Intelligence Thought Leadership Award Winner

Understanding The Stablecoins Ordinance (Part 1)

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As digital currencies continue to gain popularity worldwide, Hong Kong has enacted the Stablecoins Ordinance (Cap. 656) ("SCO"), ushering in a new era for digital asset regulation.

Hong KongTechnology
Sherman Yan
Sherman Yan
Dominic Wai
Dominic Wai
Michael Szeto
Michael Szeto
Maxwell Chan
Maxwell Chan
Olivia Kung
Olivia Kung

Introduction

As digital currencies continue to gain popularity worldwide, Hong Kong has enacted the Stablecoins Ordinance (Cap. 656) ("SCO"), ushering in a new era for digital asset regulation. Officially published on 30 May 2025 and effective from 1 August 2025, the SCO empowers the Hong Kong Monetary Authority ("HKMA") to regulate fiat-referenced stablecoins and related activities, aiming to safeguard monetary stability and protect the interests of the public. In this newsletter, we examine the four key concepts that sophisticated investors and finance professionals must understand to navigate this new regulatory landscape.

Key concepts in the SCO

  1. What is a "stablecoin"?

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