Hong Kong is expected to issue the first batch of stablecoin issuer licenses within two weeks, reportedly selecting HSBC and Standard Chartered as the first companies to receive the long-awaited approval.
HSBC, Standard Chartered Leads Hong Kong’s Stablecoin Race
On Friday, Bloomberg reported that HSBC, Hong Kong’s largest bank by assets, and a joint venture led by Standard Chartered will be among the first companies to receive stablecoin licenses from the Hong Kong Monetary Authority (HKMA) this month.
Authorities are reportedly prioritizing institutions that have already been approved to issue banks and will approve two banks in the first phase, according to people familiar with the matter. Notably, the HKMA favors bank-led stablecoin issuers due to their strong capital base and ability to ensure greater security while facilitating wider adoption, sources confirm.
Last month, the chief executive of the financial authority, Eddie Yue, announced that he will issue the first batch, a batch of stablecoin provider licenses in March as the review of 36 applications is almost completed.
The HKMA enacted the Stablecoins Ordinance last August, 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 financial regulator.
The number of licenses and the timetable have not been finalized and are subject to change. However, sources have suggested March 24 as a possible date, as revealed by the South China Morning Post (SCMP), which first broke the news.
Industry sources suggested that Hong Kong’s licensing regime would prioritize the local currency. Standard Chartered has already announced plans to issue a Hong Kong dollar token.
The London-based bank, along with Animoca Brands and Hong Kong Telecommunications (HKT), formed a joint venture last year to apply for a license to issue a HKD-denominated stablecoin.
Since 2024, the three have been part of the stablecoin program that releases the financial authority’s sandbox, which has enabled the limited evaluation of these tokens in all different situations, including e-commerce payments, cross-border transactions, and tokenized asset trading.
RD Technologies, a Hong Kong-based fintech company founded by former HKMA chief executive Norman Chan Tak-lam, and JD Coinlink, the fintech arm of Chinese e-commerce giant JD.com, also began testing HKD-pegged tokens under the regulator’s sandbox program last year.
Meanwhile, HSBC’s possible approval is reported to have surprised the industry, as the bank is not in the HKMA-led sandbox. HSBC focuses on tokenization projects, including token deposits.
However, the bank has reportedly been working closely with local and global players in the digital-asset space and is committed to playing an important role in Hong Kong’s developing financial system.
A ‘Checkpoint’ for Mainland Financial Innovation
Hong Kong’s expected approval comes amid China’s recent decision to explicitly ban the offshore tokenization of real world assets (RWAs), tighten scrutiny of related offshore activities, and ban the issuance of offshore yuan-pegged coins without authorization.
Last month, Chinese authorities reaffirmed their long-standing ban on virtual assets, saying domestic companies and overseas entities under their control were prohibited from issuing virtual currency abroad without official permission.
As reported by Bitcoinist, legal experts have suggested that the ambitions of Hong Kong to establish itself as the leading controlled hub for stablecoins were in danger of being threatened by the People’s Bank of China’s apparent crackdown on this sector.
Nevertheless, experts believe that Hong Kong can serve as a testing ground for financial innovation, given the competition with the US and favorable conditions for internationalization of the yuan, SCMP noted.
“Hong Kong is a testing ground for Chinese goods and blockchain capital,” Raymond Chan, chairman of the Greater Bay Area FinTech League, told reporters. “We are a firewall that protects against challenges that could disrupt the market in China, because of our comprehensive regulations.”
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