Hong Kong’s financial authorities have announced that they will soon issue the first, limited batch of licenses to stablecoin providers as the application review process nears completion.
HKMA To Issue Limited Stablecoin License Soon
On Monday, the Hong Kong Monetary Authority (HKMA) Chief Executive, Eddie Yue, announced that the regulatory agency is preparing to issue the first batch of highly anticipated stablecoin licenses next month.
At the Legislative Council meeting, Yue confirmed that the financial authorities expect to issue “a very small number” of stablecoin issuance licenses in March, according to a Reuters report.
In August, the HKMA enacted the Stablecoins Ordinance, which directs any person or entity that wants to issue any fiat-referenced stablecoin (FRS) in Hong Kong, or any Hong Kong Dollar (HKD) token, to obtain a license from the regulator.
Local media reported that more than 30 companies have applied for the license, including the overseas unit of Chinese financial technology giant Ant Group and logistics technology company Reitar Logtech.
In December, legal experts suggested that Hong Kong’s ambitions to become a major regulated center for stablecoins could be overshadowed by the People’s Bank of China’s apparent crackdown on the sector.
As reported by Bitcoinist, top financial regulators confirmed that stablecoins do not qualify as legal tender in the country, which could delay the first schedule before 2026 and affect the HKMA’s approval of projects involving yuan or Chinese institutions.
However, Hong Kong’s Finance Secretary, Paul Chan Mo-po, recently confirmed the regulator’s plan to license stablecoin issuers in the first half of the year at the World Economic Forum in Davos.
In a press conference on Monday, the Chief Executive of the HKMA is reported to have noted that their application review process is nearing completion. Yue also highlighted that the regulator focuses on use cases, risk management, anti-money laundering (AML) measures, and asset support.
In addition, he asserted that licensees must comply with local laws for cross-border operations, but added that “joint agreements with other jurisdictions may be considered in the future.”
Hong Kong Continues Efforts to Regulate Crypto
Hong Kong has been developing a comprehensive framework to support the expansion of the digital assets industry as part of its long-term strategy to become a global crypto hub.
Notably, financial authorities have been reviewing regulations to allow insurance companies to invest in cryptocurrencies and the infrastructure sector. In addition, the administration is among the 76 markets that have committed to using the new global standard of the Organization for Economic Co-operation and Development (OECD) for the exchange of tax information related to crypto assets.
The upcoming crypto reporting framework, the Crypto Asset Reporting Framework (CARF), aims to bring crypto users across borders under global tax transparency rules, thereby preventing tax evasion. Hong Kong is expected to launch its first cross-border exchange of crypto reporting data in 2028.
However, the Hong Kong Securities & Futures Professionals Association (HKSFPA) has expressed its concerns about the implementation of OECD’s CARF and related amendments made to Hong Kong’s Common Reporting Standard (CRS).
The group expressed strong support for the proposals, but urged regulators to reduce record-keeping requirements for dissolved entities and penalties for individual accounts not filed for minor technical errors. The Professional Association warned that these aspects of CARF and the CRS amendments could create operational and liability risks for market participants.
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