Hong Kong’s First Stablecoin Approvals
Hong Kong’s monetary authority has issued its first stablecoin licenses, and the choices are telling. HSBC and a Standard Chartered-led consortium called Anchorpoint Financial received the initial approvals on Friday. This marks the first batch under the Stablecoins Ordinance that took effect in August 2025.
Eddie Yue, the HKMA’s chief executive, said they look forward to the issuers launching business according to their plans. He mentioned exploring growth opportunities while properly managing risks. The hope, he added, is that regulated stablecoins will address pain points in financial activities and support digital asset development in Hong Kong.
What’s interesting is the selection process. The HKMA assessed 36 applications but signaled from the start that only a small number would get through. Financial Secretary Paul Chan said back in February that approvals would be limited, with the regulator prioritizing risk management, reserve quality, and anti-money-laundering controls.
Bank-Led Approach
The decision to license Hong Kong’s note-issuing banks first seems deliberate. HSBC and Standard Chartered are two of only three commercial banks authorized to print Hong Kong dollar banknotes. That system dates to 1846, when private banks began issuing currency backed by silver deposits.
Yue drew a parallel in a December 2023 blog post. He noted that pre-1935 banknotes issued by commercial banks in exchange for deposited silver were a form of “private money.” Stablecoins, he suggested, function as their blockchain-based equivalent—tokens with stable value that can serve as a medium of exchange on-chain.
Today’s system works differently, of course. Each note-issuing bank deposits U.S. dollars with the government’s Exchange Fund at the fixed rate of HK$7.80 per dollar. They receive Certificates of Indebtedness in return, against which they print banknotes.
Strict Identity Requirements
The licenses come with what might be one of the world’s strictest KYC frameworks for digital money. Under the HKMA’s AML guidelines, licensed stablecoins can only be transferred to wallets whose owners have been identity-verified. The travel rule applies to transfers above HK$8,000, which is about $1,000.
In practice, this means HKD stablecoins will likely embed compliance checks into their smart contracts. They’ll probably restrict transfers to wallets listed in an on-chain white list. That makes them structurally different from freely transferable tokens like USDT or USDC.
This bank-led stablecoin model also reflects something else. The HKMA appears to be deprioritizing its central bank digital currency for retail use. An 11-group pilot program completed in October found the retail case was weak.
Market Challenges Ahead
Standard Chartered CEO Bill Winters said Hong Kong’s push into stablecoins and tokenized deposits could lay the foundation for a new era of digital trade settlement. He positioned them as a new medium for cross-border commerce.
But whether the market agrees remains to be seen. Stablecoins are a roughly $310 billion asset class, and USD-denominated tokens dominate nearly all of it. Data shows that the largest stablecoins by market cap are dollar-pegged, with no euro- or yen-pegged tokens breaking into the top ranks.
Hong Kong is betting that regulated, bank-issued HKD stablecoins can carve out a role in regional trade settlement. They’re issued by the same institutions, under the same constraints, but on new rails.
The real question, I think, is whether a non-dollar stablecoin—however tightly regulated—can build the network effects needed to compete. It’s an ambitious move, and the coming months will show whether this approach gains traction or remains a niche offering in a dollar-dominated space.
