The Hong Kong Monetary Authority (HKMA) announced on April 10th that it has issued its first batch of stablecoin issuer licenses. Anchor Financial Technologies Limited, a consortium formed by Standard Chartered Bank (Hong Kong) Limited, Hong Kong Telecom, and an unnamed group, along with The Hong Kong and Shanghai Banking Corporation Limited, have become the inaugural licensed institutions. The licenses are effective immediately.
This milestone marks the official commencement of Hong Kong's regulatory framework for stablecoins, entering a new phase of implementation.
The licensed institutions plan to officially launch their services within the coming months after completing necessary preparatory work.
HKMA Chief Executive Eddie Yue stated, "The issuance of stablecoin licenses is a significant milestone for Hong Kong's digital asset development. The regulatory framework provides a structured and orderly environment for stablecoin issuers, enabling them to leverage innovative technology while safeguarding user rights and managing associated risks. This promotes the healthy, responsible, and sustainable growth of Hong Kong's stablecoin ecosystem. I look forward to the licensed institutions commencing operations as planned, actively expanding their services under robust risk management, promoting the application of compliant stablecoins, addressing pain points in financial and economic activities, and creating value for citizens and businesses."
Mr. Yue highlighted that the development of Hong Kong's stablecoin regulatory regime, from public consultation and legislative drafting to implementation and licensing, has adhered to the risk-based principle of "same activity, same risk, same regulation." The framework is modeled on international standards, aiming to be both secure and flexible, managing risks related to financial stability, anti-money laundering, and investor protection, while allowing for adjustments based on international trends and market developments. The objective is for compliant stablecoins to play a positive role in various applications and effectively address real-world economic and financial challenges.
The application window for the first phase of stablecoin licenses closed on September 30, 2025, with the HKMA receiving submissions from 36 institutions. Over the past six months, the regulatory team conducted comprehensive and rigorous assessments of each application, engaging in continuous communication and information verification with applicants to ensure a fair and standardized approval process.
The HKMA emphasized that the licensing bar is set high, with approval focusing on two key dimensions: robust risk management capabilities and compliance with relevant regulations in Hong Kong and other jurisdictions; and the applicant's ability to propose specific use cases along with viable business plans and development strategies.
According to their plans, both licensed institutions will initially issue Hong Kong dollar-pegged stablecoins. Their business strategies and development directions cover four main areas: In cross-border payments, leveraging the advantages of stablecoins and the issuers' extensive international networks to provide efficient, transparent, and lower-cost payment solutions for businesses and individuals, subject to regulatory compliance in other regions. For local payments, utilizing existing infrastructure and customer bases to accelerate the adoption of stablecoins in Hong Kong, offering secure, fast, and efficient transaction and settlement experiences. In tokenized asset trading, compliant stablecoins will serve as settlement tools to facilitate real-time on-chain transactions, support the growth of the tokenized asset market, enhance liquidity, and explore applications in collateral management. Regarding innovative applications, the programmable nature of stablecoins will be harnessed to advance conditional payments, supply chain finance, and other novel use cases.
The HKMA noted that both licensed issuers have banking backgrounds and have participated in its central bank digital currency (CBDC) and tokenized deposit pilot projects. This has provided them with a deeper understanding of various digital currency functions and applications, beneficial for exploring possibilities in "future payments."
The institutions plan to gradually involve more enterprises, such as scenario partners, to jointly promote the adoption of compliant stablecoins once their operations are stable. They will also expand stablecoin applications and explore more overseas markets based on operational experience, market conditions, and international regulatory developments, while considering issuing stablecoins in other currencies.
Before officially launching compliant stablecoins, licensed issuers must complete various preparatory tasks, including technology platform and system testing, implementation of risk controls, and staffing. Based on current plans, regulated stablecoins in Hong Kong are expected to debut from mid-year to the second half of this year.
The total number of licenses issued in the future is expected to be very limited. Stablecoins have garnered significant global attention over the past year. High volatility in virtual currencies and instances of stablecoins de-pegging or crashing have demonstrated that they are not always "stable."
On February 6th, eight Chinese regulatory bodies, including the People's Bank of China, jointly issued a notice reiterating that virtual currency-related activities within China are considered illegal financial activities. It prohibited the tokenization of real-world assets (RWA) domestically to further prevent and address risks associated with virtual currencies and protect public assets.
The notice provided a clear stance on stablecoins: those pegged to fiat currencies effectively perform some functions of legal tender in circulation. Consequently, it explicitly stated that without approval from relevant authorities, domestic entities and their controlled overseas affiliates are prohibited from issuing virtual currencies abroad. Furthermore, no entity or individual, domestic or foreign, is permitted to issue Renminbi-pegged stablecoins overseas without proper authorization.
Following this stringent regulatory signal from mainland China, market analysts suggested it indicated a strict policy stance towards overseas activities by domestic entities. Legal experts noted that major mainland tech firms would likely remain cautious and might not pursue stablecoin licenses.
Regarding unsuccessful applicants from the first batch and future applicants, the HKMA stated it will maintain communication and assess applications according to relevant laws and uniform regulatory standards.
The HKMA will adopt an open yet cautious approach to any potential future license issuances, with no definitive plans at this stage. However, it reiterated that, considering the risks involved, user protection, market capacity, and long-term development, the licensing threshold will remain very high. Even if more licenses are issued later, the overall number will be extremely limited. The operational results and market response from the first two licensees will aid the HKMA in making more comprehensive assessments.
The HKMA had previously indicated that only a small number of licenses would be issued initially, suggesting many participants may ultimately be disappointed.
Mr. Yue remarked in July last year that even for successful applicants, given the emphasis on steady development and the substantial resource investment required initially, the contribution of these businesses to short-term profitability remains highly uncertain.
On April 10th, the HKMA cautioned that licensed stablecoin services and products are not yet available. The public must remain vigilant against any fraudulent activities impersonating licensed issuers or compliant stablecoins. For verification, individuals can consult the HKMA's register or contact licensed institutions directly. The public should only purchase or use stablecoins through regulated and official channels.
Looking ahead, the HKMA emphasized that many jurisdictions worldwide are formulating stablecoin regulations. Major international financial bodies, such as the Financial Stability Board, and regulators are actively researching and discussing various aspects of stablecoin operations and risk management, including oversight models for large global stablecoin issuers. Global regulatory directions are expected to become clearer. The HKMA will actively participate in these discussions, sharing Hong Kong's implementation experience, and will continually review its regulatory framework based on international trends and practices. This aims to lay a solid foundation for Hong Kong as a digital finance hub, providing a path for stablecoin regulation that balances innovation and stability.
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