Hong Kong to Vet Stablecoin Holders, Operations Over $8,000 to Be Scrutinized

The Hong Kong Monetary Authority (HKMA) has revealed that stablecoin holders will be verified using KYC methods to alleviate financial risks derived from the usage of these assets. The authority explained that three types of institutions will be allowed to exert these verifications.

HKMA: Hong Kong to Verify Stablecoin Users

Hong Kong is now gearing up to introduce stablecoins into its financial system, taking precautions on the potential illicit uses of these assets. According to local media, the Hong Kong Monetary Authority (HKMA), the region’s central banking institution, will require full verification of stablecoin holders to address money laundering risks.

Local news site Caixin reported that the authority determined this to be necessary because the industry’s current ongoing monitoring tools and solutions “haven’t fully satisfied the authorities with their ability to effectively manage money laundering and financial crime risks.”

The HKMA revealed this at a technical briefing touching on the stablecoin issuer licensing regime, which will come into effect on August 1. In a press release, the authority highlighted that “interested parties that consider themselves sufficiently ready and wish to be considered early should submit the application to the HKMA by 30 September 2025.”

Furthermore, the authority noted that the identity of stablecoin holders will be verified by licensed stablecoin issuers, appropriately regulated financial institutions, virtual asset service providers, or reliable third parties.

In the recently issued “Guideline on Anti-Money Laundering and Counter-Financing of Terrorism (For Licensed Stablecoin Issuers),” the authority specifies that, additionally, licensees must verify the stablecoin holder’s identity before “carrying out an occasional transaction (e.g., issuance and redemption of stablecoin) involving an amount equal to or above $8,000 for a customer.”

Recently, the CEO of the Hong Kong Monetary Authority (HKMA), Eddie Yue, warned about the craze that could follow the opening of the Hong Kong market to stablecoins. “What’s more concerning is the potential for a bubble. The recent hype surrounding stablecoins has led to excessive market excitement,” he stressed, referring to the valuation rise of companies entering the crypto ecosystem.

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