On May 21, the Legislative Council of Hong Kong passed the Stablecoins Bill, which establishes a licensing regime for issuers of fiat-referenced stablecoins (FRS) in Hong Kong. Upon implementation of the Stablecoins Ordinance, issuers of FRS in Hong Kong will be required to obtain a license from the Hong Kong Monetary Authority. According to a recent statement, the legislation is intended to "advance the development of Web3 in Asia and globally, with Hong Kong at the center."
The Bank for International Settlements (BIS) recently released a working paper on the verifiability of "total value locked" (TVL) in decentralized finance (DeFi) protocols. According to the authors of the working paper, TVL measures the aggregate value of crypto-assets deposited in DeFi protocols but is currently not well understood due to limitations on calculation methods, which the authors identify as including a lack of standardization and reliance on self-reports from DeFi community members. The authors of the working paper propose that TVL measurement be standardized and introduce a "verifiable Total Value Locked" metric to measure TVL on the basis of on-chain data and standard balance queries.
On May 28, United Kingdom financial regulator released consultation papers titled "Stablecoin Issuance and Cryptoasset Custody" (CP25/14) and "A prudential regime for cryptoasset firms" (CP25/15). The consultation papers follow His Majesty's Treasury's draft statutory instrument and accompanying policy note of April 2025 related to the UK's forthcoming financial services regulatory regime for crypto-assets. The consultation papers call for public comment on the proposed regulation of the issuance of "qualifying stablecoins" and of the safeguarding of "qualifying cryptoassets."
For more information, please refer to the following links:
- Government welcomes passage of the Stablecoins Bill
- Stablecoins Ordinance
- Consultation Paper CP25/14*** Stablecoin Issuance and Cryptoasset Custody
- Consultation Paper CP25/15*** A prudential regime for cryptoasset firms
- BIS Working Papers No 1268 Towards verifiability of total value locked (TVL) in decentralized finance
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