Hong Kong Bans Unlicensed Stablecoin Promotions—Jail Time Possible

Hong Kong is taking a hardline stance against unregulated stablecoin promotions, with a new law taking effect August 1 that could land violators in jail for up to six months.

The HKMA issued an urgent warning Wednesday, telling investors to steer clear of unauthorized fiat-referenced stablecoin (FRS) offerings or risk legal consequences. Fines of HK$50,000 (US$6,300) will also apply.

“The market’s hype-driven volatility demands stronger controls,” said HKMA Chief Eddie Yue, signaling a crackdown on speculative excesses. The move aims to stabilize the sector and shield retail participants from fraud.