Beyond Bitcoin: How Stablecoin in HK & US Will Reshape Your Business

Hong Kong & US stablecoin rules landed within weeks. See how their stark differences in reserves, access, and control reshape global finance and your options.

When Hong Kong’s Monetary Authority released its ‘Consultation Paper on the Regulatory Framework for Stablecoin Issuers’ in early 2024, it marked Asia’s first step toward comprehensive stablecoin legislation. After 15 months of public consultation and sandbox trials (with participants like Standard Chartered and JD.com), the Stablecoin Ordinance was finally published on May 21, 2025.

Across the Pacific, the U.S. moved in near lockstep: April 2025 saw the ‘STABLE Act’ pass into law, mandating 100% high-liquidity reserves for stablecoin issuers. Hot on its heels, the Senate greenlit the GENIUS Act on May 20, establishing a tiered licensing regime.

Within just one month, the world’s two financial powerhouses unveiled their stablecoin rulebooks. How do these frameworks differ, and what do they signal for global finance? Hongda will break it down through our recent blog.

Section 1:  Policy Showdown – Key Differences at a Glance

While both jurisdictions now regulate stablecoins, their approaches reveal striking contrasts:

Section 2:  Decoding Strategic Intent: Market Environment and Geopolitical Considerations

Behind the apparent differences in these two policies lie distinct approaches by the Hong Kong SAR Government and the U.S. government in implementation paths, economic structures, and financial objectives.

Hong Kong’s Stablecoin Regulatory Logic:

• Capital and Reserve Requirements: Issuers must maintain 100% reserve coverage with high-quality liquid assets, segregated and custodied independently.
• Localized Operations: Mandatory establishment of a physical entity in Hong Kong to ensure regulatory accessibility.
• Sales Restrictions: Only licensed issuers, banks, licensed corporations, and licensed virtual asset trading platforms may sell stablecoins to the public.

U.S. Dual-Track Stablecoin Model:

• Issuer Restrictions: Only banks, credit unions, and non-bank institutions approved by the Treasury may issue stablecoins.
• Strict Asset Anchoring: Reserves must be 100% USD cash/short-term Treasuries, with interest payments prohibited.
• "Substantially Equivalent" Principle: Allows state-level regulation but requires proof to the Treasury that the framework meets federal standards.

Comparison of Regulatory Designs:

Both jurisdictions reach a consensus on mandatory 100% reserve backing, emphasis on redemption guarantees, and strict anti-money laundering requirements. However, the regulatory designs reflect distinct regional characteristics:

• Hong Kong employs a single-regulator model where the HKMA centralizes licensing, daily supervision, and violation enforcement. This highly centralized structure enhances efficiency, allowing applicants to complete the entire process through a single window.
• The U.S. maintains its financial regulatory tradition with federal-state power sharing: the Treasury sets national standards while state regulators retain flexibility under the "substantially equivalent" principle.

For overseas issuers:

• Hong Kong adopts a ‘regulatory equivalence’ principle—issuers from jurisdictions recognized by the HKMA as having equivalent standards may apply for licensing.
• The U.S. requires foreign issuers to establish local entities, emphasizing direct U.S. regulatory oversight.

The most profound difference lies in reserve asset policies:

• Hong Kong requires 100% reserve coverage with high-quality liquid assets (e.g., cash, AA+-rated sovereign bonds)
• The U.S. mandates 100% reserves in USD assets (cash/short-term Treasuries) and explicitly prohibits user interest payments.

Section 3: Hong Kong Stablecoin Licensing Guide: from Application to Compliance

Basic Compliance Requirements:

• Physical Presence: Applicants must establish a Hong Kong office with local management (subject to fit-and-proper test).
• Capital and Reserves: Minimum HKD 25 million paid-in capital + 100% reserve coverage.
• Technical Requirements: Systems must ensure timely redemptions within 1 business day.

Ongoing Compliance Mechanisms:

• Reserve Disclosures: Monthly asset composition reports to the HKMA.
• System Availability: Robust operational systems required (no specific uptime % defined).
• Redemption Safeguards: All redemptions must be processed within 1 business day
• No Promotional Compliance: Strict prohibition of misleading terms like ‘high-yield’ or ‘zero-risk’. Violators may face criminal charges under the Trade Descriptions Ordinance.

Conclusion

As HKMA officers review applications and the Fed processes thousands of USDC transactions per second, stablecoins are quietly rewiring finance. For businesses, the choice isn’t about better or worse – it’s about fit:

• Hong Kong unlocks cross-border efficiency via RMB corridors;
• The U.S. offers plug-and-play access to consumer networks;

Much like the complementary roles of USD and HKD in global settlements, these frameworks represent divergent yet interoperable visions. One truth emerges: The stablecoin revolution isn’t coming – it’s already redesigning our financial landscape.