Hong Kong has introduced strict rules for stablecoins and is preparing to launch crypto derivatives

Key points:

• On August 1, rules came into force that criminalize the issuance and promotion of unlicensed stablecoins and establish strict AML and KYC requirements.
• DBS Hong Kong CEO Sebastian Paredes noted that the rules will effectively rule out the use of stablecoins for blockchain derivatives.
• At the same time, the SFC is preparing to allow professional investors to trade crypto derivatives, whose market exceeded $21 trillion in the first quarter of 2025.

On August 1, new rules for stablecoin issuers came into force in Hong Kong. The law tightened anti-money laundering (AML) measures and required companies to comply with Know Your Customer (KYC) requirements. In addition, it immediately banned unlicensed projects and introduced a public register of authorized issuers.

Sebastian Paredes, the CEO of DBS Hong Kong, said that such regulations would significantly restrict trading in derivatives using stablecoins on the blockchain. According to him, cryptocurrency assets are traded worldwide, and local barriers make it virtually impossible to integrate them into complex financial products.

DBS’s position

Paredes noted that the bank will monitor regulatory developments and focus on creating ecosystem solutions for stablecoin issuers and users. Instead of derivatives, he sees potential in cross-border settlements and payments.

The DBS executive recalled that over the past three years, the bank in Singapore has been developing a regulated digital exchange for cryptocurrencies, tokenized assets, and bonds. In August 2025, DBS placed tokenized structured bonds on the Ethereum blockchain and participates in the management of USDG stablecoin reserves.

Market outlook

Hong Kong continues to develop comprehensive regulations for the crypto industry. In June 2025, the Securities and Futures Commission (SFC) announced that it would allow professional investors to trade crypto derivatives. This move will significantly expand the local market, given that the volume of derivatives in Q1 2025 exceeded $21 trillion, while spot trading amounted to only $4,6 trillion.

At the same time, the Hong Kong Monetary Authority launched a licensing regime for fiat-pegged stablecoins. Issuers must obtain a license, comply with reserve requirements, and ensure reverse redemption.