Covering Hong Kong's stablecoin policy implementation—here’s all you need to know
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Covering Hong Kong's stablecoin policy implementation—here’s all you need to know
A comprehensive overview of the latest news on Hong Kong's stablecoin.
Navigating Web3 tides with focused insightsAuthors: Peggy, 0x2333
Starting August 1, 2025, the Hong Kong Monetary Authority (HKMA) will open applications for stablecoin issuance licenses, marking a new phase in Hong Kong's stablecoin development as it moves into formal implementation.
This policy has been long anticipated. Over the past year, the HKMA has advanced sandbox testing of stablecoin use cases and gradually clarified regulatory standards and application pathways. Now, participating institutions will transition from testing to issuing and circulating stablecoins under a formal regulatory framework.
According to incomplete statistics, dozens of institutions have expressed intentions to apply for stablecoin licenses. Meanwhile, more local banks, technology firms, and Web3 teams are preparing further around clearing systems, custody mechanisms, and payment interfaces.
This article will continuously track the latest developments related to Hong Kong stablecoins for industry reference.
Regulatory Progress on Hong Kong Stablecoins
1. Regulatory Framework Takes Effect
The Stablecoin Ordinance will officially take effect on August 1, 2025.
The HKMA will simultaneously publish four related documents (available only in English):
· Summary and final version of the Guideline on Supervision of Licensed Stablecoin Issuers
· Summary and final version of the Anti-Money Laundering and Counter-Terrorist Financing Guideline (for Licensed Stablecoin Issuers)
· Summary Description of the Stablecoin Issuer Licensing Regime
· Summary Description of Transitional Provisions for Existing Stablecoin Issuers
2. Licensing Process and Requirements
The HKMA will accept first-round applications for stablecoin issuer licenses between August 1 and September 30, 2025.
Institutions are encouraged to proactively contact the HKMA via official email before August 31 to facilitate communication on regulatory expectations and feedback.
The HKMA reminds market participants: public communications must be cautious; falsely claiming to hold or be applying for a license is illegal.
3. Application Conditions and Compliance Requirements
All holders of Hong Kong-compliant stablecoins must undergo identity verification, effectively implementing a real-name system.
Eric Chan, Assistant Chief Executive (Regulation and AML) at the HKMA, stated this requirement is stricter than the previous "whitelist" system; relaxation may be possible if technology matures in the future.
Legislative Council member Wilson Ng added: KYC will indeed be implemented by the HKMA, and real-name verification is one possible method. Specific plans will be proposed by issuers and confirmed upon HKMA review.
4. HKMA’s Stance on Fiat-Backed Currencies
According to HKMA Deputy Chief Executive Nelson Chow:
· Applications can be made for stablecoins pegged to a single fiat currency,
· Or those pegged to a basket of fiat currencies,
· But the currency must be clearly specified during application.
Nelson Chow also emphasized: the licensing bar is high, with the first license expected to be issued early next year.
5. Transitional Arrangements and Categorized Treatment
Following the implementation of the Stablecoin Ordinance, a six-month transition period will be established, during which the HKMA will categorize existing issuers:
· Those meeting regulatory requirements: eligible for temporary licenses;
· Those failing to meet standards within three months: required to wind down operations within four months;
· Non-compliant entities: must cease operations within one month of notification.
Requirements include: full reserves, redemption processed within one day, physical presence in Hong Kong, maintenance of financial resources, KYC, transaction monitoring, etc.
Violators face penalties including fines, suspension, or revocation of licenses.
Latest Policy Statements on Stablecoins from Hong Kong Authorities
With the Stablecoin Ordinance set to take effect on August 1, 2025, the Hong Kong government and relevant agencies have recently intensified their policy signals on stablecoins across various platforms. These statements cover not only regulatory logic and licensing mechanisms but also key issues such as pegged currencies, practical applications, and risk management, gradually shaping the operational framework of Hong Kong's stablecoin regulatory system.
1. Stablecoins Are Not Speculative Tools, But Financial Infrastructure
A repeatedly emphasized position in all public statements is that stablecoins should not become instruments for market speculation.
On July 20, David Hong, Chairman of the Financial Services Development Council, noted at an annual report press conference that stablecoins should fulfill their role of “stability,” and digitization of asset markets is a long-term strategic endeavor that cannot be approached with short-term thinking. He added that different assets will eventually be tokenized, but this process won’t happen overnight nor should there be expectations for the entire financial system to “go fully on-chain” in the near term.
Financial Secretary Christopher Hui has reiterated similar views multiple times in recent months. He believes stablecoins should be seen as tools for enhancing financial efficiency rather than profit-making vehicles. On June 29, he stated the government will uphold clear regulatory principles and require issuers to possess capital, reserve mechanisms, and redemption capabilities to prevent systemic risks and safeguard monetary sovereignty.
Financial Secretary Paul Chan has also pointed out in several signed articles that stablecoins possess programmable features suitable for automated payments and restructuring financial service processes, but their development must remain grounded in real-economy needs. He emphasized: "It’s not merely about chasing technology, nor a celebration of tools."
Voice from central think tanks also highlights the macro context of stablecoins. On June 21, Li Yang, Chair of the National Institute of Financial Development, said stablecoins are essentially digital extensions of the U.S. dollar and tools for advancing digital dollar hegemony. China should leverage this trend to promote RMB internationalization and consider building complementary mechanisms between RMB stablecoins and central bank digital currencies.
2. Tightening of Licensing System, High Entry Barriers
Hong Kong’s stablecoin regulatory regime will adopt high-standard scrutiny. On July 30, HKMA Deputy Chief Executive Nelson Chow explicitly stated at a technical briefing that the licensing threshold is “very high.” In the initial stage, numerous licenses will not be issued en masse; instead, each application will be assessed individually based on quality. The first license is expected to be granted early next year.
Edwin Chow, Chief Executive of the HKMA, previously wrote that compliance requirements for stablecoin issuers are nearly equivalent to those for e-wallets and banks. Whether in asset reserve management, redemption policies, or anti-money laundering mechanisms, consistent regulation will apply. Only a “small number” of licenses will be issued initially, with emphasis on evaluating business proposals, practical use cases, reserve capacity, and technical security.
Hui has repeatedly stressed that issuers must complete redemptions within “one day” of user requests, establish stability mechanisms and client asset segregation, and fully implement anti-money laundering and counter-terrorism financing regulations.
3. Priority Use Cases: Cross-Border Settlement First, Web3 Second
Compared to narratives emphasizing “going on-chain” or “DeFi adoption,” policymakers consistently position stablecoins primarily around cross-border payments and clearing systems.
Edwin Chow stated that the first batch of stablecoins will mainly focus on cross-border trade settlements and Web3 scenario testing. He emphasized that participation in the sandbox is not a prerequisite for licensing—entering the test program does not guarantee future formal approval.
Hui mentioned in interviews that stablecoins could serve as alternative payment instruments in volatile “Belt and Road” regions, particularly applicable in infrastructure projects and engineering contracts where foreign exchange markets are underdeveloped.
Paul Chan said Hong Kong will continue advancing tokenization of financial assets, gradually introducing token-based settlement mechanisms in green bonds, ETFs, and commodity markets, using stablecoins to bridge transaction currencies and on-chain assets.
4. Open Fiat Peg Mechanism, RMB Stablecoins Require Caution
Regarding pegged currencies, policymakers have clearly stated that Hong Kong’s regulatory framework is designed to be open.
On July 30, Nelson Chow said applicants may choose to anchor to a single fiat currency or a basket of currencies, provided they clearly declare this during application.
Previously, Hui discussed the possibility of “RMB stablecoins” on multiple occasions. He noted that while pegging to RMB is not legally prohibited, coordination with mainland authorities would be necessary due to implications for exchange rate and macroeconomic policy. “Hong Kong has legal space, but if we proceed, we must consider the nation’s overall exchange rate and monetary policy.”
Paul Chan also pointed out in his blog that allowing different fiat currencies as anchor assets would attract more international institutions to issue stablecoins in Hong Kong based on actual use cases.
5. Cautious Warnings to Investors and the Public
While advancing institutional development, several policymakers have issued sober reminders amid market enthusiasm.
Legislative Council member Wilson Ng said Hong Kong has vast potential to develop stablecoins and will become an experimental ground integrating finance with the real economy. However, he specifically warned retail investors to remain vigilant against emerging asset classes, avoid blindly following trends, and fully understand product risks.
The HKMA has also issued a notice reminding the public to beware of unauthorized projects or individuals falsely claiming to be “licensed” or “in the process of applying for a license,” stressing that holding unlicensed stablecoins carries personal risk.
How Is the Market Viewing Hong Kong’s Stablecoin Regulation?
With the imminent implementation of Hong Kong’s Stablecoin Ordinance, market discussions have intensified around licensing pace, application pathways, and the feasibility of RMB-pegged stablecoins. Voices from brokers, fund houses, foreign investment banks, and media are gradually revealing structural expectations and potential impacts of this regulatory regime.
1. Licensing Timeline and Expectations for First Licensees
On July 30, CITIC Securities released a research report stating that the Summary Description of the Stablecoin Issuer Licensing Regime will be the most valuable official document during the current application phase. The report forecasts that the number of initial stablecoin licenses will be “in single digits,” potentially issued by year-end. The HKMA encourages institutions to contact regulators by August 31, with the formal application deadline on September 30.
The report recommends focusing on two themes: issuers with clear likelihood of license approval, and platform companies already engaged in building stablecoin use cases.
Kam Tim, CEO of China Asset Management (Hong Kong), described the current stage as a turning point where “basic rules are set, and pilot scenarios await launch.” He revealed that the firm has participated in Hong Kong’s stablecoin sandbox testing and is exploring integrated paths in payments, subscriptions/redemptions, and asset management. He believes entities that first achieve a closed loop of “compliance + real-world deployment + asset connectivity” may emerge as leaders in the stablecoin market.
2. Regulatory Path and Dual-Track Vision for HKD/RMB
On July 23, Ping An Securities published a report suggesting Hong Kong may develop a dual-track regulatory model: “USD stablecoins connecting to international markets + HKD stablecoins linking to the mainland.” This approach aims to attract USD-dominated projects while reserving institutional space for RMB internationalization.
The report notes that Hong Kong’s definition of stablecoins isn’t limited to any specific fiat currency, and non-USD stablecoin market share may rise. Currently, Hong Kong’s stablecoin regulation already includes overseas projects partially pegged to HKD.
Xiao Feng (Chairman of HashKey Group) stated in an interview that Hong Kong stablecoin licenses won’t be restricted to HKD pegs—issuers can decide both the pegged currency and the public blockchain network used. He mentioned Ethereum, Solana, and others could serve as deployment infrastructures for Hong Kong stablecoins.
3. Policy Outlook and Financial Functionality of CNH Stablecoins
Since June, whether “offshore RMB stablecoins (CNH Stablecoin)” will be piloted first in Hong Kong has become a market focal point.
Morgan Stanley pointed out that Hong Kong’s stablecoin ordinance “lays the first legal pathway” for CNH stablecoins. Supported by an offshore liquidity pool of about 1 trillion RMB, CNH stablecoins could validate cross-border settlement feasibility without violating mainland capital controls, serving as a supplementary payment channel beyond CIPS and SWIFT.
Sophie Xing, Chief Economist for China at Morgan Stanley, suggested Hong Kong should first promote USD- and HKD-pegged stablecoins to build technological and market trust, then gradually introduce CNH stablecoins to strengthen the RMB’s position in digital payment systems.
Hong Kong Economic Journal wrote that Hong Kong could act as a “pioneer” to drive CNH stablecoin adoption in response to competition over international payment influence—but only if AML and CFT regulatory requirements are properly addressed.
Economic Observer commented that if CNH stablecoins are piloted first in Hong Kong, they would create an RMB channel independent of the SWIFT system, opening a new digital path for RMB internationalization. This initiative could become another institutional leap following the 2009 RMB cross-border settlement mechanism.
Wang Yongli, former Vice President of Bank of China, also wrote that the U.S. is strategically advancing dollar stablecoins through legislation, and China should respond actively. With its leading regulatory framework, Hong Kong has realistic conditions to pioneer CNH stablecoin trials, especially for overseas crypto asset trading and clearing.
4. Financial Market Impact and Investor Focus
GF Securities’ June 3 report noted that although Hong Kong’s stablecoin draft is still in early stages, it will bring short-term structural investment opportunities, particularly in digital currency, cross-border payments, blockchain, and RWA sectors. The report suggests that if policy explicitly supports RMB-pegged stablecoins, certain A-share companies could benefit from the compliance value unlocked via the “Hong Kong bridge.”
However, GF Securities also noted that due to strict domestic virtual asset regulations, the probability of large-scale new capital inflows remains low.
Ping An Securities further added that as global stablecoin regulation gradually forms, there is potential to establish unified international regulatory frameworks. China must seize this institutional window to explore controlled pathways through Hong Kong and avoid being fully dominated by dollar stablecoins in the digital asset domain.
Media outlets including CCTV’s Yu Yuan Tan Tian and Securities Times have published commentaries arguing that the U.S. advancing dollar digitization via stablecoins represents a new form of financial expansion. If China remains absent in stablecoin development, it risks passively responding to a dollar-dominated new settlement network.
Who Is Preparing to Apply for a Hong Kong Stablecoin License?
With the Stablecoin Ordinance set to take effect on August 1, 2025, multiple enterprises are accelerating their entry, preparing or announcing applications for stablecoin issuer licenses. These participants come from diverse backgrounds—including financial institutions, tech platforms, payment companies, and blockchain startups—reflecting the broad response triggered by Hong Kong’s upcoming stablecoin regulation.
1. Overall Market Entry Momentum
As reported on July 14, between 50 and 60 companies intend to apply for Hong Kong stablecoin licenses.
· About half are payment institutions, the other half well-known internet companies;
· Most have Chinese mainland affiliations;
· The first phase is expected to issue only 3–4 licenses, with initial stablecoins primarily pegged to HKD and USD.
2. Sandbox Pilot Institutions List (Published July 18, 2024)
The following five institutions are participating in the stablecoin issuer sandbox testing:
1. JD Blockchain Technology (Hong Kong) Limited
2. Oval Coin Innovation Technology Limited
3. Standard Chartered Bank (Hong Kong) Limited
4. Aniye Group Limited
5. Hong Kong Telecom (HKT) Limited
3. Companies Explicitly Announcing Intent to Apply or Already Applying
· China Triple Media
Announced on July 15 its intention to apply for a Hong Kong stablecoin license, with funding sourced from share placements and cash reserves.
· Tian Sheng Capital
Announced on July 11 plans to establish a digital asset trading and foreign exchange company and apply for a stablecoin license. It intends to use stablecoins for art transactions and foreign exchange services, focusing on cross-border trade settlement.
· Dmall 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 Telecom
Have publicly stated plans to jointly establish a joint venture to apply for a license and issue a Hong Kong dollar-pegged stablecoin. The stablecoin will be used in gaming virtual asset transactions, cross-border trade, and financial settlements.
· JD.com
Has publicly disclosed on its website plans to issue a stablecoin pegged 1:1 to the Hong Kong dollar in Hong Kong. The issuing entity is JD Blockchain Technology (Hong Kong), which is also listed in the HKMA’s stablecoin “sandbox” participant list.
· Ant International
According to sources in June, the company plans to immediately apply for an issuer license once Hong Kong’s Stablecoin Ordinance takes effect, and also intends to seek approvals in Singapore and Luxembourg.
· LianLian Digital
According to sources, LianLian Digital is actively exploring applications for stablecoin licenses in Hong Kong and Singapore. Its subsidiary DFX Labs already holds a virtual asset trading platform license issued by the Hong Kong SFC.
4. Companies Researching, Monitoring, or Exploring Related Businesses
· Ping An Insurance
Responded on an interactive platform on July 21 that it has noted changes in Hong Kong’s stablecoin regulation, is closely monitoring the situation, and actively studying potential implications.
· Sanwei Information Security
On June 30, stated it has participated in cryptocurrency and stablecoin-related businesses in Hong Kong, providing security support as a cryptographic infrastructure provider for relevant projects.
5. Clarifications
· Octopus Cards Limited
Was rumored to be involved in a stablecoin accelerator project. The company later clarified it only participated in an exploratory program led by Brinc in an advisory capacity, which was conceptual research rather than product development or formal collaboration.
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