Hong Kong has officially passed a landmark Stablecoin Bill, positioning itself as a major hub for digital finance and Web3 development. On May 21, Legislative Council member Johnny Ng announced that the bill had cleared its third and final reading, setting the stage for a full licensing regime to launch before the end of 2025.

Under the new law, all stablecoins must be backed by fiat currency. Institutions from around the world will be allowed to apply for stablecoin issuance licenses from the Hong Kong Monetary Authority. Ng invited global players to enter the market and offered to personally support introductions and partnerships to advance Hong Kong’s Web3 ecosystem.

Ng emphasized that this legislation is just the first step. He sees stablecoins as a critical piece in expanding real-world blockchain applications, especially in retail payments, international trade, and peer-to-peer finance. To boost their competitiveness, Ng proposed allowing stablecoin holders to earn interest on their holdings, which he believes would promote market stability and attract broader adoption.

His call for interest-bearing stablecoins aligns with a growing trend. Research shows that the total circulation of yield-bearing stablecoins has surged to $11 billion in 2025—up from $1.5 billion earlier this year—now making up 4.5% of the entire stablecoin market.

With the new regulatory framework, Hong Kong is sending a clear message: it wants to lead the next era of global digital finance. The move is expected to attract major crypto and fintech firms seeking a regulated, innovation-friendly environment in Asia.