Hong Kong is on the verge of a milestone for Asia’s digital asset industry. The Hong Kong Monetary Authority (HKMA) is expected to approve its first stablecoin issuer licenses by late March 2026, with banking giants HSBC and Standard Chartered among the leading candidates, according to an exclusive report by the South China Morning Post.
The licenses would be the first granted under Hong Kong’s Stablecoin Ordinance, which took effect on August 1, 2025. The HKMA received 36 applications from banks, fintech companies, asset managers, and Web3 startups, but plans to approve only a “very small number” in this initial batch. The decision reflects Hong Kong’s deliberate strategy of prioritizing well-capitalized institutions to ensure financial stability while launching its regulated stablecoin market.
The move carries major implications for the global stablecoin market, currently dominated by dollar-pegged tokens like Tether (USDT) and USDC. If HSBC and Standard Chartered launch HKD-pegged stablecoins, it would mark the first time two of the world’s largest banks become licensed stablecoin issuers, potentially reshaping how institutional players view digital currencies.
Who Is Getting Licensed and Why
The HKMA is prioritizing Hong Kong’s three note-issuing banks, HSBC, Standard Chartered, and Bank of China, as its first licensed stablecoin issuers. These institutions already issue physical Hong Kong dollar banknotes and operate under heavy regulatory oversight, making them natural candidates for a framework designed to minimize systemic risk.
| Applicant | Structure | Stablecoin Plan | Sandbox Participation |
|---|---|---|---|
| Standard Chartered | Joint venture with Animoca Brands and HKT (Anchorpoint Financial) | HKD-pegged stablecoin for cross-border payments | Yes (2024 HKMA sandbox) |
| HSBC | Direct application | Expected HKD-pegged stablecoin | No (joined the regime later) |
| Bank of China | Not yet confirmed | Likely HKD-pegged | Not confirmed |
Standard Chartered has been the most public about its plans. In February 2025, the bank’s Hong Kong division formed a joint venture called Anchorpoint Financial with blockchain gaming company Animoca Brands and HKT (Hong Kong Telecommunications). The entity participated in the HKMA’s stablecoin issuer sandbox in 2024 and has stated plans to issue an HKD-backed stablecoin targeting cross-border trade settlement.
HSBC’s expected approval is notable because the bank did not participate in the HKMA’s 2024 sandbox program. However, the South China Morning Post reports that HSBC signaled its intent to join the stablecoin regime as part of a broader digital innovation push. As Asia’s largest bank by assets, HSBC’s entry would bring significant institutional credibility to Hong Kong’s stablecoin ecosystem.
How Hong Kong’s Stablecoin Framework Works
Hong Kong’s regulatory approach stands out for its emphasis on bank-led issuance and strict compliance standards. The Stablecoin Ordinance, passed by the Legislative Council and effective since August 2025, makes it illegal to issue fiat-referenced stablecoins in Hong Kong without an HKMA license.
Key requirements for licensed issuers include:
- Full reserve backing: Stablecoins must be 100% backed by high-quality liquid assets at all times
- Reserve segregation: Backing assets must be held separately from the issuer’s own funds
- AML/CFT compliance: Issuers must meet anti-money laundering and counter-terrorist financing standards set by the HKMA
- Redemption guarantees: Holders must be able to redeem stablecoins for fiat currency at par value
- Regular auditing: Independent audits of reserve holdings are required
- Financial stability measures: The HKMA can impose additional requirements on issuers deemed systemically important
The framework deliberately targets fiat-referenced stablecoins, meaning tokens pegged to currencies like the Hong Kong dollar or U.S. dollar. Algorithmic stablecoins and crypto-collateralized tokens fall outside the current regime.
36 Applications, Very Few Winners
The HKMA’s decision to grant only a small number of initial licenses from 36 applications mirrors its approach to virtual asset trading platform (VATP) licensing, where the regulator also took a cautious, phased approach.
The 36 applicants span a wide range of entities:
- Banks: HSBC, Standard Chartered, and potentially Bank of China
- Technology companies: Including HKT through the Anchorpoint Financial joint venture
- Web3 firms: Animoca Brands and other blockchain-native companies
- Asset managers and payment companies: Seeking to integrate stablecoin settlement
- Startups: Early-stage firms with novel stablecoin use cases
Industry sources expect the HKMA to approve between two and five licenses in the first batch, with additional approvals rolling out through 2026. The regulator has emphasized that applicants must demonstrate robust governance, technical infrastructure, and financial resilience before receiving approval.
Hong Kong vs. the Global Stablecoin Race
Hong Kong’s licensing push comes as jurisdictions worldwide compete to establish themselves as stablecoin-friendly financial centers. The city’s approach sits between the more permissive U.S. framework and the EU’s comprehensive MiCA regime.
| Jurisdiction | Framework | Key Feature | Stablecoin Focus |
|---|---|---|---|
| Hong Kong | Stablecoin Ordinance (Aug 2025) | Bank-led issuance, HKMA licensing | HKD-pegged, then multi-currency |
| Singapore | MAS Payment Services Act | Open to fintech applicants, 100% reserve backing | Multi-currency |
| EU | MiCA (Jun 2024) | Comprehensive framework, no individual holding caps | EUR-pegged (e-money tokens) |
| UK | FCA/BoE framework (draft 2026) | Proposed holding limits (£20,000/individual), no self-custody | GBP-pegged |
| Japan | Payment Services Act amendments | Bank and trust company issuance | JPY-pegged |
Hong Kong’s strategic advantage is its position as a gateway between mainland China and global financial markets. While Beijing maintains its ban on cryptocurrency trading, Hong Kong operates under the “one country, two systems” framework, allowing it to build a regulated digital asset ecosystem that Chinese institutions can engage with through proper channels.
The APAC region now accounts for nearly 45% of global on-chain transaction value, and Asia’s stablecoin market reached approximately $300 billion by February 2026. However, roughly 99% of stablecoins remain pegged to the U.S. dollar, creating what regulators across Asia view as a monetary sovereignty concern. HKD-pegged stablecoins from major banks could begin shifting that balance.
Why $4 Trillion Banks Issuing Stablecoins Changes Everything
The entry of HSBC and Standard Chartered into stablecoin issuance represents a significant validation of digital assets by traditional finance. These are not crypto-native startups but globally systemically important banks with combined assets exceeding $4 trillion. That is a very different stamp of approval than another DeFi protocol launching a token.
For the broader stablecoin market, the implications include:
- Institutional legitimacy: Bank-issued stablecoins could attract corporate treasurers and institutional investors who have avoided crypto-native tokens like USDT due to counterparty risk concerns
- Cross-border payments: HKD stablecoins built on blockchain rails could compete with SWIFT for Asia-Pacific trade settlement, particularly along China’s Belt and Road trade corridors
- Regulatory precedent: If Hong Kong’s bank-led model succeeds, other Asian jurisdictions may adopt similar frameworks
- Competition for USDC and USDT: While dollar-pegged stablecoins will remain dominant, local-currency stablecoins from major banks could capture meaningful market share in regional trade
Related Reading
- Bank of England Signals Flexibility on Sterling Stablecoin Holding Limits
- SEC and CFTC Sign Historic MOU to End Regulatory Turf War and Unify Crypto Oversight
- Stablecoin Transfer Volume Hits $1.8T as USDC Overtakes USDT in Monthly Flows
Sources
- South China Morning Post: Hong Kong poised to grant first stablecoin licences to HSBC, Standard Chartered
- Cointelegraph: Hong Kong to Approve First Stablecoin Licenses for Banks
- The Block: HSBC, Standard Chartered to be first recipients of Hong Kong stablecoin licenses
- Reuters: Standard Chartered, HKT, Animoca to form JV for HK dollar-backed stablecoin
- HKMA: Regulatory Regime for Stablecoin Issuers
- CoinDesk: Hong Kong will start granting stablecoin issuer licenses in March
This is not financial advice. Always do your own research before making investment decisions.
