Management Summary
- Purpose / Background: Following the enactment of the Stablecoins Ordinance (Cap. 656) on 1 August 2025, the HKMA is providing regulatory guidance for Authorized Institutions (AIs) intending to offer dealing, advisory, and portfolio management services related to "Relevant Stablecoins" (stablecoins issued by licensed issuers under the SO).
- One-line conclusion: AIs wishing to engage in Relevant Stablecoin-related activities must adhere to the standards applicable to registered institutions and engage in prior consultation with the HKMA.
- Key Changes:
- Established a clear regulatory framework for AIs to provide services involving licensed stablecoins.
- Explicitly mandates that Relevant Stablecoins are not to be categorized as "investment products" under this guidance.
- Standardized compliance requirements by aligning them with the concurrent "Virtual asset-related activities" circular.
- Requirement for mandatory pre-engagement discussions with the HKMA before launching these activities.
- Key Dates / Deadlines: Effective immediately (27 May 2026).
- Applicability / Impact scope: All Authorized Institutions (AIs) in Hong Kong intending to conduct dealing, advisory, or portfolio management services involving Relevant Stablecoins.
- Recommended management actions:
- Review internal policies to align with the standards for registered institutions as prescribed in the 27 May 2026 HKMA Circular.
- Ensure compliance and legal departments review the specific terms and conditions outlined in Appendices A1 and A2.
- Initiate formal consultation/discussion with the HKMA prior to launching any Relevant Stablecoin-related service offerings.
- Update internal training and product classification frameworks to reflect that these stablecoins are not treated as traditional investment products.
Detailed Summary
1) Document overview
This circular serves as the primary regulatory directive for AIs regarding the provision of dealing, advisory, and portfolio management services for "Relevant Stablecoins"—defined as stablecoins issued by entities licensed under the Stablecoins Ordinance (Cap. 656).
2) Main requirements
- Standards: AIs must adhere to the same regulatory standards as "registered institutions" regarding virtual asset-related activities.
- Consultation: AIs are strictly required to discuss business plans with the HKMA before commencing any of the aforementioned activities.
- Classification: Relevant Stablecoins must not be treated or marketed as "investment products" within the context of these specific services.
3) Key changes
- The circular formalizes the operational boundary for AIs post-SO implementation, ensuring that stablecoin-related services are subject to the same oversight as other virtual asset activities conducted by registered institutions.
4) Important dates & transition
- Effective Date: 27 May 2026.
- Transition: Ongoing—AIs must engage with the HKMA immediately if they intend to enter or currently conduct these activities.
5) Impact and risks
- Compliance: Requires immediate alignment of existing virtual asset service frameworks with the new requirements.
- Operations: Pre-launch consultations with the HKMA represent a new operational hurdle before the rollout of services.
- Reporting/Risk: AIs must manage the risk of potential misclassification of these stablecoins as investment products.
6) Compliance action checklist
- Verify current virtual asset service offerings against the 27 May 2026 HKMA Circular standards.
- Evaluate the terms in Appendices A1 (dealing/advisory) and A2 (portfolio management) to ensure system and process capability.
- Schedule a consultation meeting with the HKMA supervisory team.
- Document and update internal risk management procedures.
7) Appendices/attachments summary
- Appendix A1: Provides specific terms and conditions for AIs performing dealing and advisory services involving Relevant Stablecoins.
- Appendix A2: Sets out the regulatory requirements and conditions specifically for AIs performing portfolio management services for Relevant Stablecoins.