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07/08/25 14:38 UTC-04

Hong Kong Introduces Mandatory Identification for Stablecoin Holders

Starting August 1, new regulations have come into effect in Hong Kong, requiring stablecoin issuers to verify the identity of every holder of their tokens by enforcing Know Your Customer (KYC) procedures.

The Hong Kong Monetary Authority (HKMA) justified the move as a measure to combat money laundering and terrorist financing. However, Bo Tang, Deputy Director of the Institute of Financial Research at the Hong Kong University of Science and Technology, warned that stricter stablecoin regulations could hinder the development of crypto in the region.

According to Tang, strict customer identification rules may infringe on user privacy and cause Hong Kong to lose competitiveness in global digital finance markets. For example, if a company makes cross-border payments using Hong Kong-regulated stablecoins, the recipient would have to open an account in Hong Kong just to complete KYC.

If real-name identification becomes mandatory for stablecoin transactions, these assets may lose their advantages over traditional money transfers, Tang cautioned. While blockchain enables instant, 24/7 transfers with low fees, the added burden of KYC might drive away foreign users from Hong Kong platforms, he added.

Tang believes that HKMA's strict requirements aim to cool down the hype among local investors seeking to invest in stablecoins and other crypto assets.

Recently, HKMA announced it will issue licenses to a limited number of stablecoin issuers, granting permission only to companies that present practical use cases for their tokens.

See also: "Chainlink Launches Real-Time Data Streams for U.S. Stocks and ETFs"

#Hong Kong #Stablecoins

Editor: Alyona Nabok
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