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Hong Kong is set to introduce strict licensing rules for stablecoin issuers in August, aiming to bolster its role in regional trade while challenging U.S. dollar dominance. Financial Secretary Paul Chan highlights stablecoins’ potential for cost-effective cross-border payments, aligning with China’s de-dollarization push. However, high capital requirements may deter global players like Circle and Tether.
- Hong Kong's stablecoin rules mandate strict reserve management and AML controls, with licensing effective August 1.
- The regulation aligns with China's de-dollarization strategy but sets capital requirements three times higher than Singapore's.
- Analysts expect the rules to favor local issuers, as global players like Tether face hurdles due to mandated Hong Kong operational presence.
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