The Hong Kong Monetary Authority (HKMA) has expressed caution regarding the burgeoning interest in stablecoins, raising warnings about speculation surrounding these digital assets. This alert comes shortly before the implementation of Hong Kong’s stablecoin ordinance, set to take effect on August 1, 2025.

In a recent blog, HKMA’s CEO Eddie Yue commented on the issue: “We need to guard against excessive market and public opinion speculation. Recently, there are some phenomena that deserve our attention.”

He further stated that while discussions about stablecoins emphasize their potential impact on traditional finance, practical applications have been lacking: “There will be a clear gap once it is time to move from the virtual to the real.”

Hong Kong Customs Officers Arrest Two for Laundering $146.5 Million

According to a report from the South China Morning Post on July 24, 2025, Hong Kong customs officials have apprehended two individuals over cash smuggling and questionable transactions, which allegedly involved the Tether stablecoin (USDT).

“A Customs and Excise Department spokesman indicated that the investigation uncovered their methods of cash smuggling out of the city, suggesting a link to unverified funds sourced through USDT,” the article noted.

“Tether once again in the spotlight for money laundering. Will this be the new normal? Two arrested in Hong Kong over laundering HK$1.15 billion in case involving stablecoin” - Richard Turrin on Twitter

Financial Secretary Confirms Stablecoin Licenses to Roll Out Starting August

Hong Kong aims to become the first region to establish a regulated framework for stablecoins. The soon-to-be-enforced stablecoin ordinance mandates that any entity or individual involved in issuing fiat-referenced stablecoins must secure a license from the HKMA to operate within the administration.

The legislation, which is designed to protect the public and investors, also restricts advertising only to licensed issuers. As the implementation date approaches, these efforts aim to ensure consumer safety and minimize fraudulent actions.

Key Takeaways:

• The warnings from the HKMA reflect direct concerns about stablecoins’ potential implications ahead of their new ordinance.
• The arrests underscore the enforcement challenges posed by digital currencies, particularly regarding their use in illicit activities.