New Law in Hong Kong Targets Promotion of Unlicensed Stablecoins
From August 1, 2025, it will become illegal to advertise or offer fiat-backed stablecoins to the public in Hong Kong unless the issuer has a proper license. This move comes under the new Stablecoin Ordinance introduced by the Hong Kong Monetary Authority (HKMA) to tighten oversight of the digital asset space.
Retail-facing ads or promotions involving unlicensed stablecoins could lead to penalties of up to HK$50,000 (approximately $6,300) and a possible jail sentence of six months. The HKMA’s Chief Executive, Eddie Yue, emphasized that residents should stay away from unapproved stablecoins, warning that promoting or using them could land individuals in legal trouble.
Yue pointed out that speculation and excessive hype around stablecoins have fueled market volatility, artificially boosting some company valuations and trading activity. While numerous firms have submitted applications to issue stablecoins, Yue noted that many of them lacked solid operational strategies and adequate risk controls, making approval unlikely for most applicants.
The HKMA has made it clear that only firms demonstrating strong compliance frameworks and the ability to safeguard investor interests will be granted licenses.
This regulatory shift reflects a growing global trend. For example, the European Union’s MiCA framework introduces steep financial penalties—up to €5 million or up to 12.5% of annual turnover—for unauthorised crypto advertising. However, the EU rules stop short of jail terms. Meanwhile, in the UK, the Financial Conduct Authority continues to battle crypto-related ad violations, but with limited success—only about 50% of flagged ads were removed as of early 2025.
Hong Kong’s new law signals a decisive effort to bring credibility to the stablecoin market, safeguard retail investors, and align with evolving international standards on digital asset promotion.
