HKSI Paper 1 Regulatory overview of the Hong Kong financial industry question: Stablecoins Ordinance Cap

HKSI Paper 1Regulatory overview of the Hong Kong financial industry

Merlion Digital Pte Ltd, a Singapore company with no Hong Kong office, plans to issue in Singapore, in the course of business, a stablecoin referenced to the Hong Kong dollar. Under the Stablecoins Ordinance (Cap. 656), what is its position?

A It needs a Hong Kong licence only once the coin is traded on a licensed platform
B It needs an SFC licence under Part 5B of the AMLO, as an issuer of virtual assets
C It needs a licence from the Monetary Authority, as the coin references the Hong Kong dollar
D It needs no Hong Kong licence, because the coin will be issued and sold only outside Hong Kong

Show the answer and explanation

Answer: C. It needs a licence from the Monetary Authority, as the coin references the Hong Kong dollar

Cap. 656 s.5(1)(a) makes it a regulated stablecoin activity to issue a specified stablecoin in Hong Kong in the course of business, or to issue one outside Hong Kong that purports to keep a stable value by reference (wholly or partly) to the Hong Kong dollar. Section 8 bars that activity without a licence, which the Monetary Authority grants (regime in force 1 August 2025; first licences granted 10 April 2026). Issuing offshore does not escape the Hong Kong dollar limb. Part 5B of the AMLO licenses virtual asset trading platforms, not stablecoin issuers. Issuance, not platform trading, triggers the licence. Source: Stablecoins Ordinance (Cap. 656) ss.5(1)(a), 8; HKMA 'Regulatory regime for stablecoin issuers' and press release 'Granting of stablecoin issuer licences', 10 April 2026 (hkma.gov.hk) (as at October 2026).

Common mistake

Candidates assume an offshore issuer is outside the regime and miss the Hong Kong dollar limb of s.5(1)(a)(ii).

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