Hong Kong has enacted legislation that establishes a licensing regime for fiat-referenced stablecoin (FRS) issuers, aiming to bolster its status as a digital asset hub while ensuring investor protections. The law, passed by the Legislative Council, mandates that all FRS issuers must obtain a license from the Hong Kong Monetary Authority (HKMA), meeting requirements related to reserve asset management, redemption policies, and anti-money laundering controls. The initiative reflects Hong Kong's commitment to adopting a risk-based regulatory approach in line with international standards. Additionally, the legislation prohibits unauthorized advertisements related to stablecoin offerings, even during a six-month grace period before the law takes full effect. As the market for stablecoins in the region remains small compared to global volumes, industry experts believe the new regulations will provide clarity and structure for issuers. The law's introduction coincides with similar regulatory advances in the United States, further underscoring the competitive landscape for crypto regulation in Asia and beyond.

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