Hong Kong mandates KYC for stablecoin transactions above $8,000, aiming to reduce financial crime and strengthen regulatory oversight.
Hong Kong is preparing to introduce new rules for stablecoin holders and issuers to reduce financial crime risks. The Hong Kong Monetary Authority (HKMA) declared that any transaction of stablecoin will need to pass identity verification by using know-your-customer (KYC) measures when the amount of the transaction reaches over 8,000. Verification of this will be done by three categories of institutions, namely, licensed stablecoin issuers, regulated financial institutions or virtual asset service providers, and trusted third parties.
HKMA Issues AML Rules for Licensed Stablecoin Platforms
The announcement was carried out at a technical briefing held on July 29, 2025, when HKMA presented the licensing regime of the stablecoin issuers. The first round of licenses will be available to apply for between August 1 and September 30, 2025. Licensing will likely continue beyond this period. However, those who want early attention can apply during this time. Moreover, these actions aim to ensure stablecoins are used responsibly. Authorities want them to operate within a clear legal framework.
The HKMA said that the monitoring mechanisms used in the crypto sector today are not robust enough to identify and discourage money laundering and other criminal acts. Thus, Hong Kong is going to make KYC verification even before the issuance or redemption of a stablecoin. An Anti-Money Laundering and Counter-Financing of Terrorism Guideline was also published by the HKMA, specifically for licensed stablecoin issuers. The guideline provides that the verification is to be done whenever an individual transaction is made and is worth or greater than the amount of $8,000.
In addition, the HKMA also cautioned all players in the market about their communications to the markets. False statement of being a licensed or applying issuer is a legal offense under the Stablecoins Ordinance. As of now, HKMA has not licensed any stablecoins. The licensed institutions will be published in a public register on the HKMA site. In the meantime, the citizens are asked not to deal with any person who purports to be licensed until this can be confirmed.
Related Reading: Hong Kong Launches Stablecoin Licensing Regime Starting August 2025
Hong Kong Strengthens Trust in Stablecoins via KYC Rules
These steps show that Hong Kong is taking a careful and planned approach to stablecoin rules. The city aims to manage the fast growth of the stablecoin market with clear and steady measures. This strategy helps reduce confusion and builds trust among users and businesses.
As more stablecoins enter the market, regulators now focus more on safety. They especially want to protect retail investors and institutions using these assets. Moreover, stablecoin rules aim to reduce risks and increase trust in the system. This approach shows Hong Kong’s commitment to responsible digital finance. Identity checks are to be implemented to avoid misuse and make people more confident in the services provided regarding stablecoins.
Hong Kong has put the emphasis on stricter regulations, a precedent that might be followed by other financial centers as the adoption of stablecoins rises. The licensing system and KYC rules aim to create a safer digital payment environment and reduce risks linked to anonymous payments. In addition, the regulation will bring the stablecoin market closer to traditional financial standards while still allowing space for innovation.
To sum up, the new rules for stablecoin holders and issuers in Hong Kong show a move toward responsible oversight. By verifying identities and setting clear rules, the HKMA hopes to build a more secure and transparent digital finance system.
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