Hong Kong stablecoin regulations officially take effect, the landscape of encryption regulation accelerates differentiation.

On August 1, the Hong Kong "Stablecoin Ordinance" officially came into effect, marking the implementation of the world's first comprehensive regulatory framework for fiat stablecoins. This milestone event is not only an important advancement in Hong Kong's virtual currency sector but will also have a profound impact on the global encryption regulatory landscape.

The new regulations require institutions issuing fiat stablecoins in Hong Kong or offshore issuers of stablecoins pegged to the value of the Hong Kong dollar to implement a mandatory licensing system. The paid-in capital of the applying entity must not be less than 25 million HKD. Regarding reserve assets, the regulations explicitly require full reserves, and issuers must allocate 100% of reserve assets to highly liquid assets such as cash and short-term government bonds. These assets must be independently custodied by licensed banks, and each type of stablecoin must have an independent reserve asset portfolio.

Anti-money laundering is a top priority of the regulations. Issuers must establish a comprehensive anti-money laundering mechanism, publicly disclose daily reserve asset audit reports, and prohibit interest payments to prevent disguised deposits. In terms of redemption, users can unconditionally redeem fiat currency at face value, and the issuer must process redemption requests within 1 working day.

On the eve of the regulations coming into effect, the Hong Kong Monetary Authority released a series of supporting regulatory documents, including the "Regulatory Guidelines for Licensed Stablecoin Issuers" and the "Guidelines for Combating Money Laundering and Terrorist Financing." These documents further elaborate on regulatory requirements, particularly in the areas of customer identity recognition and verification.

According to the guidelines, licensed stablecoin issuers are required to take effective measures to identify and verify the identity of stablecoin holders. Customers must undergo a complete customer due diligence process, and relevant information must be retained for at least 5 years. Non-customer holders generally do not need to verify their identity directly, but when suspicious circumstances are discovered, the licensee must further investigate and verify the identity of the relevant coin holders.

These stringent KYC requirements have sparked widespread discussion in the market. In practical applications, especially in cross-border payment scenarios, real-time identity verification of anonymous holders poses significant challenges. These requirements may effectively exclude other types of applicants besides banking institutions, while also limiting the interaction possibilities between Hong Kong stablecoins and DeFi protocols.

In addition to internal supervision, the regulations also set clear requirements for external compliance. License holders must comply with the laws and regulatory requirements of the relevant jurisdictions, which means that issuers need to have a complete risk control system for cross-border operations. They need to prohibit providing services to countries and regions where there is a stablecoin ban, and may even need to identify the use of VPNs.

Overall, the Hong Kong stablecoin regulations set extremely high thresholds and impose many restrictions on the important functions of stablecoins. This not only blocks the DeFi, anonymous wallets, open protocols, and other encryption functions but also strictly regulates the use by overseas economies. These restrictions may hinder the development of Hong Kong stablecoins, especially against the backdrop of an already limited market size.

In contrast, the recent attitude of American regulatory agencies has shown a significant difference. The new chairman of the U.S. Securities and Exchange Commission (SEC), Paul Atkins, has launched the "Project Crypto" policy, proposing the idea of fully putting the U.S. financial market on-chain. This plan includes the reclassification of encryption assets, granting legitimacy to decentralized applications such as DeFi, creating "super applications," and introducing innovative exemption mechanisms.

The shift in policy in the United States reflects its efforts to establish a systematic regulatory framework around "encryption assets", providing a solid foundation and objective guarantees for the development of the encryption industry. In contrast, regions such as Hong Kong and Singapore exhibit a more conservative regulatory attitude, demonstrating a more defensive posture.

The differences in regulatory attitudes may be related to the characteristics of each region. Hong Kong and Singapore, as financial centers, place greater emphasis on stability and order; whereas the United States, as a global power, has a greater voice and tolerance for the development of emerging phenomena.

With the differentiation of regulatory frameworks, the "U.S. centric" pattern of the encryption industry may further strengthen, making the U.S. market an important battleground for determining the development of encryption projects. Other regions may need to seek differentiated development paths to find their own positioning in the global encryption ecosystem.