A Closer Look at Hong Kong’s Stablecoin Policy Launch — Here’s What You Need to Know

Effective August 1, 2025, the Hong Kong Monetary Authority (HKMA) will open the application process for stablecoin issuance licenses, marking a new phase for the formal implementation and development of stablecoins in Hong Kong.

The HKMA has been developing this policy initiative for a considerable time. Over the past year, the HKMA advanced sandbox trials for stablecoin applications and steadily clarified its regulatory framework and application procedures. With these steps, institutions are now transitioning from pilot testing to full-scale issuance and circulation of stablecoins under an established supervisory system.

By preliminary estimates, dozens of organizations have announced plans to seek stablecoin licenses. Meanwhile, additional local banks, technology companies, and Web3 teams are preparing for the next phase, focusing on clearing systems, custody solutions, and payment interface integration.

This article will provide ongoing coverage and analysis of the latest developments in Hong Kong’s stablecoin sector for industry participants.

Progress of Hong Kong Stablecoin Regulation

1. Regulatory Framework Officially Enacted

The Stablecoin Ordinance will officially take effect on August 1, 2025.

On the same date, the HKMA will publish four related documents (English only):

· Consultation Conclusion and Supervisory Guidelines for Licensed Stablecoin Issuers

· Consultation Conclusion and Guidelines on Anti-Money Laundering and Counter-Terrorist Financing (for Licensed Stablecoin Issuers)

· Summary Description of the Stablecoin Issuer Licensing Regime

· Summary Description of Transitional Provisions for Pre-Existing Stablecoin Issuers

2. Licensing Process and Requirements

The HKMA will accept the first round of stablecoin issuer license applications from August 1, 2025, to September 30, 2025.

Entities interested in applying are encouraged to proactively contact the HKMA via its official email by August 31 to facilitate regulatory expectations and feedback discussions.

HKMA cautions market participants: All public communications must be prudent. False claims of licensing or license application status are strictly prohibited and may constitute a violation of the law.

3. Application Criteria and Compliance Requirements

All holders of compliant stablecoins in Hong Kong must undergo identity verification, essentially implementing a real-name registration system.

HKMA Assistant Chief Executive (Supervision and AML), Chen Jinghong, stated that this requirement is more stringent than the previous “whitelist” system and may be relaxed in the future as technology evolves.

Legislative Council Member Ng Kit-chung supplemented that the HKMA will enforce KYC, with real-name registration as one possible approach. Specific implementation will be determined by the issuer’s proposal and confirmed by HKMA review.

4. HKMA’s Stance on Fiat-Pegged Stablecoins

HKMA Deputy Chief Executive Howard Lee stated:

· Applications may be submitted for licenses pegged to a single fiat currency,

· or for those pegged to a basket of fiat currencies,

· but the application must clearly specify the pegged currencies.

Lee emphasized that licensing thresholds are exceptionally high, and the first license is expected to be granted early next year.

5. Transition Arrangements and Categorized Management

Upon implementation of the Stablecoin Ordinance, a six-month transitional period will commence during which the HKMA will classify and manage existing issuers as follows:

· Those meeting regulatory requirements may receive temporary licenses;

· Issuers not meeting requirements within three months must wind down operations within four months;

· Those failing to comply must cease operations within one month after being notified.

Key requirements include full reserve backing, process redemptions within one day, establishment of a physical presence in Hong Kong, maintenance of financial resources, KYC procedures, and transaction monitoring, among others.

Non-compliance may result in fines, suspension, or revocation of licenses and related penalties.

Latest Policy Statements on Stablecoins from Hong Kong Authorities

With the Stablecoin Ordinance approaching implementation on August 1, 2025, the Hong Kong government and relevant institutions have issued a series of policy signals regarding stablecoins. These communications address regulatory philosophy, licensing mechanics, fiat currency linkage, practical use cases, risk management, and other core issues. Together, they outline the structure of Hong Kong’s stablecoin regulatory framework in practice.

1. Stablecoins Are Infrastructure, Not Speculative Tools

The prevailing stance across public statements is clear: Stablecoins should not be used as vehicles for speculation.

On July 20, Financial Development Council Chairman Laurence Li remarked at the FSDC annual report release that stablecoins must deliver on their “stability” function, stressing that asset market digitalization is a long-term journey and not one to be approached with short-term thinking. He also noted that while asset tokenization is coming, the full migration of financial systems to the blockchain will not occur overnight.

Christopher Hui, Secretary for Financial Services and the Treasury, has repeatedly underscored similar sentiments, arguing that stablecoins should serve to improve financial efficiency as a development tool, not as a means for speculative gain. On June 29, he reiterated the government’s commitment to clear regulation and stipulated that issuers must maintain sufficient capital, robust reserves, and redemption capability to prevent systemic risk and safeguard monetary sovereignty.

Financial Secretary Paul Chan has written that the programmable nature of stablecoins enables automated payments and transformation of financial service processes, but stablecoin development should not lose sight of real economic needs. He emphasized: “It’s not just about chasing technology, much less a frenzy over new tools.”

Central policy think tanks have also provided input. On June 21, Li Yang, president of the National Institution for Finance and Development, commented that stablecoins essentially extend the US dollar onto blockchains and are part of the US drive to digitize dollar hegemony. He suggested China should pursue RMB internationalization and develop a complementary relationship between RMB stablecoins and the digital yuan.

2. Stricter Licensing, High Barriers to Entry

Hong Kong’s stablecoin rules feature tough licensing standards. On July 30, HKMA Deputy Chief Executive Howard Lee said at a technology briefing that licensing requirements are “very high.” In the initial stage, only a handful of licenses will be issued, with each assessed based on the quality of the application. The first license is expected in early 2026.

HKMA CEO Eddie Yue previously wrote that stablecoin issuers will face compliance standards comparable to those governing e-wallets, banks, and other financial entities—spanning asset reserve management, redemption policies, AML, and more. The initial batch of licenses will be limited, with a focus on business plans, practical deployment, reserve strength, and technological security.

Christopher Hui has repeatedly emphasized that issuers must complete user-initiated redemptions within one day, set up robust stabilization and asset segregation mechanisms, and fully implement anti-money laundering and counter-terror financing controls.

3. Cross-Border Settlement as the Primary Use Case, Web3 Secondary

Unlike narratives focused on “going on-chain” or “DeFi-ization,” the policy emphasis remains on using stablecoins primarily for cross-border payments and clearing systems.

Eddie Yue indicated the initial stablecoin cohort will be used mainly for cross-border trade settlement and for piloting Web3 scenarios. He stressed that sandbox participation is not a guarantee of a future license.

Christopher Hui pointed out in interviews that stablecoins can be an alternative payment option in “Belt and Road” markets with volatile currencies, especially for infrastructure and engineering projects in less developed FX markets.

Paul Chan stated that Hong Kong will further the tokenization of financial assets, introducing tokenized settlement in markets such as green bonds, ETFs, and commodities, using stablecoins as a bridge between transaction currencies and on-chain assets.

4. Open Approach to Pegged Currencies; RMB Stablecoins Require Prudence

On currency-pegging, officials have clarified that Hong Kong’s regulatory structure is designed to be open and flexible.

On July 30, Howard Lee said applicants may choose to peg their stablecoins to either a single fiat or a basket of fiat currencies, as long as this is specified in their submission.

Christopher Hui has previously commented on the possibility of RMB stablecoins, stating that while there is no legal ban on RMB-pegged stablecoins, any that affect foreign exchange management and macro policy will require coordination with mainland regulators. “Hong Kong has regulatory space, but broader currency and FX policy implications must be considered.”

Paul Chan wrote that allowing stablecoins to anchor to a range of fiat currencies will attract more international issuers to Hong Kong.

5. Regulatory Caution for Investors and the General Public

Officials have also offered balanced reminders as enthusiasm for stablecoin projects intensifies.

Legislator Ng Kit-chung noted that Hong Kong offers vast opportunity for stablecoin innovation and real-economy integration, but stressed that retail investors should exercise caution, avoid herd behavior, and fully assess product risks.

The HKMA has issued warnings urging the public to beware of any stablecoin projects or individuals claiming to be “licensed” or “applying for a license” without authorization, emphasizing that users bear the risks of holding unlicensed stablecoins.

Market Perspectives on Hong Kong Stablecoin Regulation

As Hong Kong’s Stablecoin Ordinance approaches implementation, market participants are actively debating licensing pace, applicable scenarios, and the future of RMB-pegged instruments. Voices from brokerages, asset managers, global banks, and media are increasingly shaping structural expectations and highlighting potential impacts.

1. Licensing Pace and Anticipated First Batch

On July 30, CITIC Securities stressed that the Summary Description of the Stablecoin Issuer Licensing Regime is the most reference-worthy document for current applicants. The report projects that only a handful of licenses will be issued initially, possibly by year-end. The HKMA encourages applicants to initiate contact by August 31, with the final application cutoff on September 30.

The report suggests monitoring two areas: issuers with a clear path to approval, and platform companies already committed to stablecoin use case development.

China Asset Management (Hong Kong) CEO Gan Tian described this phase as “basic rules set, pilots imminent.” He shared that the firm has joined sandbox trials and is exploring integrated solutions spanning payments, subscription/redemption, and asset management. He sees a focus on compliance, implementation, and asset connectivity as the formula for leadership in the stablecoin sector.

2. Regulatory Paths: “Dual Track” for HKD and RMB

On July 23, Ping An Securities suggested that Hong Kong may develop a dual-track model: USD-backed stablecoins for international connectivity, HKD-backed stablecoins for cross-border links to mainland China, all while leaving room for RMB internationalization.

The report notes Hong Kong does not restrict stablecoin pegs to specific fiat currencies, so non-USD coins could see market share growth. Some overseas projects pegged to HKD are already falling under the regulatory umbrella.

HashKey Group Chairman Xiao Feng said the license will not be limited to HKD-linked stablecoins; issuers can freely choose pegged currencies and blockchain networks, including Ethereum and Solana.

3. CNH Stablecoin: Policy and Financial Function Outlook

Since June, the prospect of Hong Kong piloting offshore RMB (CNH) stablecoins has drawn considerable market attention.

Morgan Stanley noted Hong Kong’s regulatory regime paves the way for legal CNH stablecoin issuance. With a roughly RMB 1 trillion offshore liquidity pool, CNH stablecoins could support cross-border settlement without breaching mainland capital controls, acting as a payment rail alongside CIPS and SWIFT.

Chief China Economist Xing Ziqiang of Morgan Stanley suggested first building trust with USD and HKD stablecoins before gradually onboarding CNH stablecoins as part of RMB’s digital strategy.

The Hong Kong Economic Journal argued that Hong Kong is well positioned as a “testing ground” for CNH stablecoins but stressed the necessity of robust AML and CTF compliance. The Economic Observer noted that a Hong Kong CNH stablecoin pilot could create a stand-alone RMB settlement system outside SWIFT, advancing RMB digital internationalization.

Former Bank of China Vice President Wang Yongli commented that the US is moving to legislate and institutionalize dollar stablecoins, and China should respond proactively. Hong Kong is uniquely positioned for a CNH pilot, especially for compliant crypto asset transactions and settlement offshore.

4. Financial Market Impact and Investment Focus

Guangfa Securities (June 3 report) observed that while Hong Kong’s regulatory framework is still nascent, it creates near-term investment opportunities in digital currency, cross-border payments, blockchain, and RWA segments. If RMB-pegged stablecoins gain policy support, related A-share companies could realize access driven by compliance from “Hong Kong Bridge.”

But Guangfa Securities cautioned that strict regulation of virtual assets in mainland China means major capital inflows remain unlikely in the near term.

Ping An Securities added that as the global regulatory framework coalesces, China should use the window of opportunity to develop controlled pathways through Hong Kong and avoid dollar stablecoin dominance in digital assets.

CCTV’s “Yuyuan Tantian” and Securities Times have weighed in, warning that US promotion of dollar stablecoins is a new type of financial expansion and that a passive stance from China could leave it vulnerable in future global settlement networks.

Who Is Preparing to Apply for a Hong Kong Stablecoin License?

With the Stablecoin Ordinance taking effect August 1, 2025, numerous companies are accelerating preparations to apply for stablecoin issuance licenses. Applicants span financial institutions, tech platforms, payment companies, and blockchain startups—evidence of the industry response to Hong Kong’s new regulatory landscape.

1. Overall Market Entry Interest

As of July 14 reports, 50 to 60 companies have expressed interest in applying for a Hong Kong stablecoin license.

· Roughly half are payment firms, the remainder are leading internet companies;

· Most are China-backed;

· Only 3–4 licenses are expected in the initial phase, mostly for HKD- and USD-pegged stablecoins.

2. Sandbox Pilot Participants (Announced July 18, 2024)

The following five organizations have joined the HKMA stablecoin issuer sandbox:

1. JD Digital Currency Chain Technology (Hong Kong) Co., Ltd.
2. Circle Innovation Technology Co., Ltd.
3. Standard Chartered Bank (Hong Kong) Limited
4. Anyi Group Co., Ltd.
5. Hong Kong Telecommunications (HKT) Limited

3. Companies Confirmed or Preparing to Apply for a License

· China 33 Media

Announced on July 15 its intent to apply for a Hong Kong stablecoin license, with funding from share placement and cash reserves.

· Tiansheng Capital

Announced on July 11 the formation of a digital asset trading and settlement firm and intent to apply for a stablecoin license. The firm plans to use stablecoins for art trade settlement and cross-border transactions.

· Duodian Digital

Announced on July 3 it is preparing to apply for a Hong Kong stablecoin license.

· Animoca Brands + Standard Chartered Bank (Hong Kong) + Hong Kong Telecommunications

Have publicly stated plans to form a joint venture, apply for a license, and issue an HKD stablecoin for use in in-game virtual asset trading, cross-border commerce, and financial settlement.

· JD.com

Officially disclosed plans to issue an HKD-pegged stablecoin in Hong Kong. JD Digital Currency Chain Technology (Hong Kong) is the issuing entity and a listed HKMA sandbox participant.

· Ant International

According to sources, the company intends to immediately apply for a license after the Stablecoin Ordinance takes effect, and is also pursuing licensing in Singapore and Luxembourg.

· LianLian Digital

According to sources, LianLian Digital is exploring license applications in Hong Kong and Singapore. Its subsidiary DFX Labs already holds an SFC-issued license for a Hong Kong virtual asset trading platform.

4. Companies Monitoring, Researching, or Positioning in Related Areas

· Ping An Group

Stated on July 21 its increased attention to Hong Kong stablecoin policy and active research into the field.

· Sanwei Information Security

Announced on June 30 that it is providing cryptographic infrastructure and security solutions for stablecoin and virtual currency projects in Hong Kong.

5. Clarifications

· Octopus Holdings Limited

Previously rumored as a stablecoin accelerator participant, the company clarified it is involved solely in a Brinc-led exploratory project as an advisor and not in any product development or formal partnership.

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