Too Cautious or Just Right? Hong Kong’s Stablecoin Regulations Through the Lens of the European Union

Too Cautious or Just Right? Hong Kong’s Stablecoin Regulations Through the Lens of the European Union

Law

Laurence Lai

2025

Laurence Lai and Dr Jeremmy Okonjo (Supervisor)

Following the “stablecoins summer” of 2025—when the global market value of stablecoins exceeded $160 billion—this article provides an overview of the regulatory mechanics governing stablecoins, before conducting an in-depth analysis of Hong Kong’s Stablecoins Ordinance and its comparative evaluation against the European Union’s Markets in Crypto-Assets Regulation (“MiCA”). While both regimes adopt distinct regulatory philosophies, they share a common objective: safeguarding consumer protection and financial stability. The analysis focuses on four key dimensions: jurisdictional scope, licensing requirements, reserve backing, and redemption rights. The discussion also briefly acknowledges recent developments in the United States’ GENIUS Act and the United Kingdom’s emerging framework. However, these regimes remain in early stages—particularly the UK, which is still in the consultation phase—making a comprehensive comparison premature.

stablecoins; fiat-referenced stablecoins; fiat-backed stablecoins; digital assets; blockchain regulation; Markets in Crypto-Assets Regulation (MiCA); Hong Kong Stablecoins Ordinance; Hong Kong Monetary Authority; financial services regulation; European Union