Hong Kong has issued its first two stablecoin licenses to HSBC and a consortium led by Standard Chartered, including Anchorspoint Financial and Animoca Brands. This decision was announced on Friday by the Hong Kong Monetary Authority (HKMA), marking the initial group under the Stablecoins Ordinance that became effective in August 2025.
“We are eager for these issuers to commence their operations as planned, exploring growth opportunities while effectively managing risks,” stated Eddie Yuet, HKMA chief executive, during Friday’s announcement. “Our goal is that regulated stablecoins will address challenges in financial and economic activities, delivering benefits to individuals and businesses alike, and fostering the healthy development of digital assets in Hong Kong.”
The HKMA evaluated 36 applications, with Financial Secretary Paul Chan previously indicating in his February budget speech that approvals would be limited to a few, prioritizing risk management, reserve quality, and anti-money-laundering controls.
The decision to license banks capable of issuing Hong Kong dollar banknotes seems intentional. HSBC and Standard Chartered are two of the three commercial banks authorized for this task since 1846 when private banks began issuing currency backed by silver deposits due to a lack of a colonial central bank.
In contemporary practice, each note-issuing bank deposits U.S. dollars with the government’s Exchange Fund at a fixed rate of HK$7.80 per dollar, receiving Certificates of Indebtedness in return, which underpins their ability to print banknotes.
Yue drew a comparison in his December 2023 blog post, noting that pre-1935 banknotes issued by commercial banks were akin to “private money,” with stablecoins serving as their blockchain-based counterparts—tokens maintaining stable value for on-chain transactions.
The licenses come with stringent Know Your Customer (KYC) frameworks. According to the HKMA’s anti-money laundering guidelines, licensed stablecoins can only be moved to wallets belonging to identity-verified owners, applying these rules to transfers above HK$8,000 (~$1,000).
This implies that HKD stablecoins will likely integrate compliance checks into their smart contracts, limiting transfers to wallets on an approved on-chain list. This structural difference sets them apart from freely transferable tokens like USDT or USDC.
The bank-led model also aligns with the HKMA’s decision to de-emphasize its central bank digital currency for retail use, following an 11-group pilot program completed in October that found limited retail interest.
Previously a focal point at Hong Kong Fintech Week, CBDCs received minimal attention last year, whereas stablecoins emerged as the primary discussion topic. Standard Chartered CEO Bill Winters remarked that Hong Kong’s venture into stablecoins and tokenized deposits could “lay the foundation for a new era of digital trade settlement,” suggesting their potential role in cross-border commerce.
The market’s acceptance remains uncertain. Stablecoins are an asset class valued at approximately $310 billion, with USD-denominated tokens dominating nearly all of it, as CoinGecko data indicates no euro-or yen-pegged stablecoins reaching top ranks.
Hong Kong is wagering that regulated, bank-issued HKD stablecoins can establish a niche in regional trade settlement, issued by recognized institutions under specific constraints on new platforms. The challenge lies in whether a non-dollar stablecoin, despite rigorous regulation, can develop the network effects necessary to compete.