Starting August 1, 2025, Hong Kong will criminalize the advertising and promotion of unlicensed stablecoins under its newly introduced Stablecoin Ordinance, signaling one of the most aggressive regulatory crackdowns on digital assets to date.
Violators Face Fines and Jail Time
Under the new law, anyone found promoting or offering fiat-referenced stablecoins (FRS) without a license may face:
- A fine of up to 50,000 Hong Kong dollars (≈ $6,300)
- Up to six months in jail
The Hong Kong Monetary Authority (HKMA) issued a stern warning on July 24, cautioning retail investors against engaging with unlicensed issuers to avoid unintentional legal violations.
Goal: Investor Protection and Market Stability
HKMA Chief Executive Eddie Yue stated the ordinance is designed to bring credibility and stability to the fast-growing stablecoin market, which has seen speculative hype distort stock valuations and trading behavior.
“It seems necessary to further rein in the euphoria,” Yue said, referencing wild market reactions to digital asset-related announcements.
The regulator noted a flood of licensing applications—over 50 companies have expressed interest. However, many were deemed “vague, conceptual, and lacking real-world implementation plans.”
Only a Handful Will Be Approved
Despite widespread interest, only a few licenses are expected to be granted initially. Yue emphasized that most applicants do not yet demonstrate:
- Adequate technical capabilities
- Risk management infrastructure
- Viable roadmaps
This selective approach aims to foster innovation while protecting consumers from unproven or risky offerings.
Global Context: Hong Kong Sets a High Bar
Other major jurisdictions like the European Union (MiCA) and United Kingdom (FCA) have banned unlicensed promotions, but Hong Kong is one of the first to add criminal penalties to its crypto advertising laws.
While MiCA levies multi-million-euro fines, it does not include jail time, making Hong Kong’s ordinance among the most stringent globally.
Key Takeaway
As stablecoins move toward mainstream adoption, Hong Kong’s regulatory stance signals that consumer protection and compliance are now central to crypto’s future. Projects seeking market entry must now meet high operational and legal standards, or risk criminal exposure.
For investors and builders alike, August 1 will mark a turning point in the region’s crypto evolution.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.