Gary Tiu, Executive Director and Head of Regulatory Affairs at OSL Group, shares his view on the implications of Hong Kong’s newly implemented stablecoin regulatory frameworks for the digital asset industry and the growth potential it unlocks for traditional finance amid the wave of stablecoin adoption.
On August 1, 2025, the Hong Kong Monetary Authority (HKMA) officially goes live with one of the world’s most comprehensive stablecoin regulatory frameworks. It marks a watershed moment—not only for Hong Kong, but for the evolution of digital finance globally. This new regime introduces a licensing system for fiat-referenced stablecoins, requiring full reserve backing, redemption assurances, and strict anti-money laundering (AML) and know-your-customer (KYC) controls. The framework clearly prioritizes investor protection and safeguards systemic stability, while laying the foundation for institutional trust and wider adoption.
With this new framework, stablecoins will no longer be crypto novelties in Hong Kong. Instead, both the market and regulators have now recognized their potential and value as legal, compliant, credible, transparent, and efficient financial instruments—capable of reshaping payments, remittances, and commerce. For the first time, users and institutions will be able to evaluate stablecoin issuers and their products based on clear and unified regulatory standards. This brings greater predictability and confidence to the market regarding the popularity and adoption of stablecoins. The HKMA may issue the first batch of licenses in just a few months, setting the stage for a secure and scalable ecosystem where compliant innovation can thrive.
While opportunities arise, there is, understandably, a philosophical tension at play. Web3’s appeals to developers, users, and investors come from its efficiency, openness, decentralization and borderless state. The industry’s early days of loose oversight and uncertainty created fertile ground for experimentation and market-driven incentives, bringing together a global community around shared ideals of decentralization. Yet as the sector embraces clearer regulations and compliance, an important question emerges: Could this new sense of certainty—while reducing risks—also stifle some of the industry’s original spirit of innovation and its foundational values?
OSL takes this issue seriously. As Hong Kong’s only listed and regulated digital asset infrastructure platform, we have spent years pioneering new solutions while staying firmly committed to regulatory compliance. On July 25, OSL announced it had secured HK$2.355 billion (around US$300 million) through a share placement and new share issuance, with around 80% of the proceeds dedicated to global strategic acquisitions and business development including payment and stablecoins. This marks the largest disclosed fundraising in Asia’s digital asset sector in the past three years. On the surface, this was a company-specific fundraising. However, this is much more than that - it is a clear sign that the capital markets believe in a compliant future for stablecoins, and a strong vote of confidence in OSL’s strategy and the progress we have made together with our partners.
Common Use Cases
Stablecoins are rapidly transforming financial transactions, with cross-border payments leading the way. By providing near-instant, low-cost, and highly transparent transfers, stablecoins can address persistent challenges in traditional banking, such as high fees and slow settlement times. For Hong Kong’s trade- and finance-driven economy, this means businesses can use stablecoins to optimize international remittances and supply chain financing, further boosting global competitiveness. But the impact of stablecoins goes beyond cross-border payments. They are set to revolutionize domestic and international payment ecosystems by enabling seamless retail transactions and peer-to-peer transfers, expanding access for the underbanked and promoting greater financial inclusion. At the same time, stablecoins are playing an increasingly vital role in decentralized finance (DeFi), asset tokenization, and smart contract platforms—driving innovation in areas like programmable payments and on-chain collateralized lending.
As legal clarity around stablecoins continues to grow, these applications are becoming more secure and compliant, paving the way for broader adoption across a wide range of industries.
Opportunities for TradFi
Hong Kong's stablecoin policy creates new opportunities for banks to engage with crypto companies, bridging the gap between traditional finance and the digital asset ecosystem. The regulatory clarity significantly reduces the risks associated with handling digital assets. Particularly, licensed stablecoins offer a stable, regulated financial instrument that institutions like banks can easily integrate into their services, such as custody, settlement, and liquidity management, allowing them to offer tailored financial products to these businesses.
Financial institutions can now explore more specialized services, such as stablecoin-backed payment processing and escrow accounts, to support crypto companies' operational needs. This fosters stronger partnerships and encourages innovation in areas like tokenized securities and cross-border trade finance. By aligning with the HKMA's compliance standards, financial institutions can attract digital asset firms seeking reliable financial infrastructure, enhancing their role in Hong Kong's evolving financial landscape.
Moreover, the policy enables institutions to explore new revenue streams by offering stablecoin-related services to retail and institutional clients. From facilitating stablecoin-based remittances to supporting DeFi integrations, institutions can position themselves as key players in the digital economy. This synergy between traditional and Web3 finance strengthens Hong Kong's financial hub status. As the leading provider of digital asset infrastructure, OSL remains dedicated to advancing these opportunities together with our partners and stakeholders, fostering a new digital financial ecosystem that champions robust compliance with ongoing innovation.
About OSL Group
OSL Group (HKEX: 863.HK) is a leading global financial infrastructure platform bridging traditional finance and the digital asset economy through blockchain technology. The Group is dedicated to providing efficient, seamless, and regulatory-compliant financial services to individuals and businesses worldwide.OSL delivers a comprehensive suite of regulated services through its licensed platforms, including 24/7 OTC brokerage with deep liquidity fiat gateways and competitive pricing; omnibus brokerage solutions enabling traditional financial institutions to integrate digital assets; SOC 2 Type 2-certified custody with up to US$1 billion insurance protection; and compliant retail trading channels; wealth management solutions, including scheduled launches on tokenised treasuries and RWAs; and in preparation for cross-border payment infrastructure via OSL Pay.
"Open, Secure, Licensed" are the principles OSL lives by. OSL is expanding its compliant infrastructure across Japan, Australia, and Europe, potentially Southeast Asia, powering the next generation of global financial infrastructure.
For media inquiries, please contact: [email protected]