Jeffrey Wu: Settlement Between Traditional Finance and Stablecoins Is Still in the Adaptation Phase, Hong Kong Should Draw on the EU’s MiCA Cross-Border Coordination Experience

Odaily Planet Daily News — Hong Kong Legislative Council member Johnny Ng posted: “After years of effort, the passage of the Stablecoin Ordinance marks a further improvement in Hong Kong’s crypto asset regulatory framework, demonstrating Hong Kong’s forward-looking approach in balancing financial innovation and risk management. As a regulator, the HKMA has made a clear distinction regarding stablecoins—they are payment tools, not investment products. This definition helps the public rationally understand the functional boundaries of stablecoins.”

The ordinance is based on international standards, sets a high threshold for licensing, and emphasizes ‘substantial application scenarios’ and ‘business sustainability.’ This not only filters for compliant and capable issuers but also helps prevent market overheating and associated risks. What I find particularly commendable is that the HKMA has communicated regulatory expectations with the industry in advance through a ‘sandbox’ approach, and has clearly stated that participation in the sandbox is not linked to licensing, reflecting the rigor and transparency of the approval process.”

I believe the future challenge lies in effectively connecting regulation with real-world application scenarios. Currently, settlement between the traditional financial system and stablecoins is still in an adaptation phase. In the future, further breakthroughs are needed in the convenience, operability, and risk prevention of using stablecoins, so as to expand the influence of compliant stablecoins in Hong Kong. In addition, I suggest that Hong Kong could draw on the EU’s MiCA experience in cross-border coordination, while continuously monitoring market changes and adjusting guidelines as needed. Overall, this move lays a foundation for Hong Kong to consolidate its position as a fintech hub, but it is important to maintain a balance between promotion and risk warnings to ensure the industry’s healthy development.”