The legal issuance of stablecoins in Hong Kong not only benefits outbound enterprises in cross-border trade but also presents other opportunities worth following.

Written by: Zhang Feng

On May 21, 2025, the Legislative Council of the Hong Kong Special Administrative Region (HKSAR) has passed the "Stablecoin Bill" in the third reading, according to a document issued by Hong Kong Legislative Council member Wu Kit-chong. After the passage of the bill, institutions are expected to apply to the Hong Kong Monetary Authority to become compliant stablecoin issuers by the end of 2025.

Wu Jiezhang stated that Hong Kong's stablecoin will use fiat currency as the underlying asset, welcoming global companies and institutions interested in issuing stablecoins to apply in Hong Kong. He emphasized that the issuance of stablecoins is only the first step of the Web 3 infrastructure. In the future, the focus will be on two directions: first, creating more stablecoin application scenarios, including physical retail, cross-border trade, and other fields; second, improving the market attributes of stablecoins, including releasing stablecoin interest to holders to enhance market competitiveness.

The passage of the Hong Kong Stablecoin Bill is expected to bring new vitality and opportunities to the financial markets of Hong Kong and the world, and will have a far-reaching impact. At present, its significance can be at least mainly reflected in four important dimensions: serving enterprises to go overseas to support cross-border trade, increasing investment channels, using RMB as the underlying asset to promote the efficiency of RMB payment and clearing, and further enhancing Hong Kong's status as a future financial center to promote the development of crypto finance and digital economy.

1. Helping enterprises with cross-border trade overseas

For a long time, enterprises going abroad have faced numerous challenges in cross-border trade payments. The traditional cross-border payment system is cumbersome and complex, involving multiple intermediaries, which leads to high transaction costs and long fund arrival times. This is undoubtedly a heavy burden for enterprises seeking efficient capital turnover. At the same time, some countries and regions have restrictions on capital outflow, making fund allocation extremely inconvenient and severely restricting the business expansion of enterprises. In addition, exchange rate fluctuations hang like the sword of Damocles, constantly threatening the profit margins of enterprises, and a slight misstep could result in significant losses during the currency exchange process.

The emergence of stablecoins provides a solution to these problems based on technological innovation. Stablecoins, represented by USDT, which has been widely used in Hong Kong, have gradually become an important settlement tool between cross-border e-commerce and freelancer teams due to their advantages of convenient transactions and low cost. The on-chain settlement system built by stablecoin based on blockchain technology greatly improves operational efficiency, and each transaction can be confirmed and settled in a short time, so that funds can be quickly withdrawn and inject impetus into the continuous operation of enterprises. At the same time, this system also lays a solid compliance foundation for future supervision.

With the passage of the Hong Kong Stablecoin Act, compliant stablecoins will be launched soon, so that enterprises can use stablecoins overseas to obtain complete legal and compliant protection. At that time, stablecoins will transform from the previous technical "detour tool" to become the "new main road" for cross-border compliant payments. Hong Kong's status as Asia's financial centre, with unregulated capital flows, a sophisticated financial services system, and the government's strong push for the development of the Web 3 industry and an inclusive regulatory environment for virtual assets, will attract global businesses to Hong Kong. With the help of Hong Kong's stablecoin payment system, enterprises can trade with partners around the world more conveniently, reduce transaction costs, improve the efficiency of capital use, and occupy a more favorable position in the international market competition.

2. Helping investors expand more investment channels

The passage of the stablecoin bill in Hong Kong has brought more investment options and potential returns for stablecoin holders. Previously, the investment channels for stablecoins were relatively limited, and the growth of holders' returns was slow. Now, with the implementation of the bill, the stablecoin market will become further standardized and diversified, leading to the emergence of more innovative investment products and services.

According to Legislator Wu Kit-chong, in the future, the interest earned by investing in stablecoins can be directly paid to holders, which will greatly increase the attractiveness and investment value of stablecoins. For overseas enterprises, this means that their idle funds have better investment channels. Enterprises can invest part of their funds in compliant stablecoin projects, and while obtaining stable income, the liquidity of funds can also be guaranteed, which can be used for business expansion or emergency needs of enterprises at any time.

The expansion of investment channels and the interest support mechanism not only help enterprises optimize the allocation of funds and improve the efficiency of capital use, but also enhance the financial stability of enterprises and provide solid financial guarantee for the long-term development of enterprises in overseas markets. Enterprises can take advantage of the additional income brought by stablecoin investment to increase investment in R&D and marketing, enhance product competitiveness, and further explore the international market.

Three, assisting the RMB to play a greater role in the digital economy

Hong Kong stablecoins use fiat currencies as the underlying assets, and assets including offshore renminbi are also being explored and considered. This characteristic is of great significance for promoting the internationalization of the renminbi and enhancing the efficiency of renminbi payment and settlement.

In cross-border trade, stablecoins with RMB as the underlying asset can be used as a medium of payment, reducing dependence on foreign currencies such as the US dollar and reducing exchange rate risks. At the same time, the distributed ledger technology of stablecoins based on blockchain can achieve real-time and efficient payment and clearing, greatly shorten the time for funds to arrive, improve the efficiency of capital turnover, and further enhance the greater role of RMB in the digital economy.

As an important bridge between the Mainland and the international market, Hong Kong promotes the application of RMB in cross-border trade and investment through stablecoins, which will help expand the influence of RMB in the international market and enhance the international status of RMB. This will create a more favorable monetary environment for overseas enterprises, which will be able to use RMB to conduct transactions more conveniently when conducting business overseas, reduce exchange costs, and enhance their competitiveness in the international market.

4. Supporting the enhancement of Hong Kong's status as a financial center to promote innovative development.

Hong Kong has always been an international financial center, occupying an important position in the global financial landscape. The passage of the stablecoin bill is a key starting point for Hong Kong to build its Web 3 infrastructure, which will further promote the development of Hong Kong in the fields of crypto finance and digital economy, consolidating its status as an international financial center.

With the development of the stablecoin market, Hong Kong will attract more leading global fintech companies, blockchain enterprises, and related professional service institutions to gather here. These companies and institutions will bring advanced technology, innovative concepts, and abundant resources, injecting new vitality into Hong Kong's financial ecosystem. At the same time, Hong Kong's sound financial regulatory system, professional financial talent pool, and convenient financial services will also provide a solid guarantee for the healthy development of the stablecoin market.

For overseas enterprises, Hong Kong's strong status as a financial center means richer financial resources, more professional financial services, and broader financing channels. Enterprises can leverage Hong Kong's financial platform to engage in cross-border financing, issue bonds, conduct mergers and acquisitions, and obtain more development funds. In addition, Hong Kong's professional service institutions, such as law firms and accounting firms, can provide comprehensive professional support to help enterprises avoid risks during the process of going global and successfully implement their international development strategies.

V. How Mainland Enterprises Can Build a Legal and Compliant Cross-Border Structure

After the passage of the Hong Kong stablecoin bill, new opportunities have arisen for mainland Chinese enterprises to build a legal and compliant cross-border payment and exchange framework, and enterprises can focus on the following aspects:

Partnering with compliant stablecoin issuers. According to the Financial Services and the Treasury Bureau of Hong Kong, only licensed fiat stablecoin issuers, banks, licensed corporations and licensed virtual asset trading platforms are authorized to sell fiat stablecoins in Hong Kong. Mainland enterprises should give priority to cooperating with these compliance entities, such as JD Coin Technology, which has entered the "sandbox" of stablecoin issuers of the Hong Kong Monetary Authority, to participate in the stablecoin business through formal channels to ensure that the source of payment and exchange is legitimate.

Make full use of Hong Kong's financial infrastructure. As an international financial centre, Hong Kong has a well-developed financial infrastructure. Enterprises can use the local mature banking system, payment and clearing system, and blockchain technology platform to combine with stablecoin payments. For example, through the account system of licensed banks in Hong Kong, the exchange of stablecoins and fiat currencies and the flow of funds are realized, the bank's strict risk control and compliance processes are used to ensure the security of transactions, and the efficiency of payment and clearing is improved with the help of blockchain technology.

Follow local jurisdictional requirements. In view of the fact that the issuance of relevant financial products by mainland assets in Hong Kong needs to comply with the requirements of various jurisdictions, mainland enterprises should ensure that the underlying assets and business operations comply with the laws and regulations of both Chinese mainland and Hong Kong when setting up cross-border payment and exchange structures. Conduct a penetrating review of the legal attributes, ownership relationships and operation models of assets, such as enterprises carrying out cross-border trade settlement based on stablecoins, to ensure that the trade background is true and legal, and the flow of funds meets the regulatory requirements of the two places, so as to avoid penalties for violations.

The Hong Kong Legislative Council passed the Stablecoin Bill in the third reading, which will play an important role in cross-border trade, investment channels, RMB payment and clearing, and the status of a financial center, providing more convenient, efficient and low-cost financial services for enterprises going overseas, helping enterprises to ride the wind and waves in the international market and achieve sustainable development, and at the same time giving Hong Kong, China and the mainland and even the world more imagination possibilities for future development.