Hong Kong’s Iron Regulator Gets Three More Years to Shape Global Crypto Rules

Core Insights - Hong Kong's Securities and Futures Commission (SFC) is enhancing its regulatory framework for virtual assets, particularly focusing on stablecoins, to strengthen the territory's position as an international financial center [1][2][4] Regulatory Developments - The stablecoin ordinance in Hong Kong came into effect on August 1, 2025, establishing a licensing regime for fiat-referenced stablecoin issuers [2][3] - Under the new regulations, stablecoins must be fully backed by reserve assets, with additional over-collateralization to mitigate market risks [3][4] - The licensing application period for stablecoin issuers closed on September 30, 2025, with the first licenses expected to be granted in early 2026 [3] Market Oversight and Investor Protection - The SFC and Hong Kong Monetary Authority (HKMA) issued a joint statement in August 2025 addressing market movements related to stablecoin-associated stocks, emphasizing the need for investor awareness regarding risks [5][6] - SFC CEO Julia Leung highlighted the importance of being cautious about unsubstantiated claims, particularly those circulating on social media [6] - Leung's tenure is set to be extended until the end of 2028, reflecting government confidence in her leadership during a transformative period for financial services regulation in Hong Kong [1][6]