Hong Kong is expected to issue its 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 Lead Stablecoin Race in Hong Kong
Bloomberg reported on Friday 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 a stablecoin license from the Hong Kong Monetary Authority (HKMA) this month.
Authorities are reportedly giving priority to institutions already authorized to handle the money, and those two banks will be approved first, according to people familiar with the matter. It is worth noting that the HKMA favors stable bank issuers due to its strong capital base and ability to provide greater security and facilitate wider adoption.
Last month, the agency’s chief executive Eddie Yue announced that he would issue the first and limited stablecoin provider licenses in March, as the review of 36 applications was almost complete.
The HKMA passed the Stablecoins Ordinance last August, which directs any person or organization wishing to list in Hong Kong any fiat-referenced stablecoin (FRS) or any Hong Kong dollar (HKD) token to obtain a license from the financial regulator.
The number of licenses and the timetable are not yet finalized and are subject to change. However, sources suggested March 24 as a possible date, according to the South China Morning Post (SCMP), which first reported the news.
Industry sources suggested that Hong Kong’s licensing regime would initially favor 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 stablecoin called HKD.
Since 2024, the trio has been part of the financial authority’s stablecoin issuer sandbox program, which has allowed limited-scale testing of these tokens in various scenarios, including e-commerce payments, cross-border trade settlements, and trading of tokenized assets.
RD Technologies, a Hong Kong-based fintech company founded by former HKMA CEO Norman Chan Tak-lam, and JD Coinlink, the fintech arm of Chinese e-commerce giant JD.com, also began testing HKD tokens under the regulator’s box-office program last year.
Meanwhile, HSBC’s potential approval has reportedly caught the industry by surprise, given the bank’s absence from the HKMA-led box. HSBC is focused on tokenization projects, including tokenized deposits.
However, the bank has reportedly been actively engaging with local and global players in the digital asset space and is committed to playing a central role in Hong Kong’s evolving financial ecosystem.
A “testing ground” for maturing financial innovation
Hong Kong’s expected approval comes amid China’s recent decision to ban the tokenization of real assets (RWA) on land, tighten scrutiny of offshore-related activities and ban unauthorized offshore issuance of yuan-denominated securities.
Last month, Chinese authorities reaffirmed their long-standing ban on virtual assets, saying they had banned domestic companies and foreign entities they control from issuing cryptocurrencies abroad without official approval.
As reported by Bitcoinist, legal experts have suggested that Hong Kong’s ambitions to establish itself as a leading regulated hub for stablecoins are at risk of being thwarted by the People’s Bank of China’s apparent pressure on the sector.
However, experts also believe that Hong Kong could serve as a testing ground for financial innovation given its competition with the US and favorable conditions for the yuan’s internationalization, SCMP noted.
“Hong Kong is a testing ground for Chinese assets and money to go overseas on the blockchain,” Raymond Chan, chairman of the Greater Bay Area FinTech League, told reporters. “Thanks to our complete set of regulations, we are a firewall that protects against problems that could disrupt the market in China.”
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