Hong Kong's stablecoin licensing regime is about to take shape, with HSBC and Standard Chartered emerging as the strongest contenders for the first batch of approvals, according to a Bloomberg report citing people familiar with the matter. The Hong Kong Monetary Authority (HKMA) is said to favor institutions that already hold authorization to issue banknotes — a status shared by the two banks — giving them a clear edge in the application process.
The HKMA has indicated that the first stablecoin licenses could be granted as early as March. So far, 36 entities have submitted applications. Regulators believe bank-led stablecoin issuers offer superior capital reserves, established compliance frameworks, and long experience operating in tightly regulated environments, which could help support wider adoption of stablecoins while maintaining financial stability.
Why Bank Status Matters for Licenses
People familiar with the matter said the HKMA plans to prioritize institutions that already hold note-issuing authorization. HSBC and Standard Chartered are among the few banks permitted to print Hong Kong dollars, a status that provides deep trust in reserve asset management and redemption guarantees. Officials believe the bank-centric model can reduce systemic risks, especially in terms of reserve transparency, liquidity management, and anti-money laundering compliance.
Under the framework, any entity seeking to issue Hong Kong dollar-pegged stablecoins must obtain approval from the HKMA. Stablecoins are a type of cryptocurrency designed to maintain a stable value by being backed by reserve assets, typically fiat currencies like the US dollar. In 2024, the HKMA launched a regulatory sandbox to test stablecoin issuance models under supervision. Participants included a consortium involving Standard Chartered, Animoca Brands, and Hong Kong Telecommunications, as well as firms like Jingdong Coinlink Technology and RD InnoTech.
Limited Licenses and Gradual Rollout
Policymakers have stressed that only a limited number of licenses will be granted initially. The cautious approach is intended to ensure approved issuers demonstrate viable business models, strong regulatory compliance, and clear real-world use cases. If HSBC and Standard Chartered secure licenses, it would mark a significant step in integrating regulated digital assets into Hong Kong's financial system — placing established banks at the forefront of the emerging stablecoin market.
The initiative is part of a broader strategy launched in 2022 to position Hong Kong as a global digital asset hub. Alongside stablecoin licensing, the city has rolled out crypto exchange licensing requirements and investor protection rules. The tilt toward banks reflects regulators' balancing act between innovation and stability: embracing digital assets without upending the traditional financial system's risk firewall.
Neither HSBC nor Standard Chartered has publicly commented on their license applications. But as the March timeline approaches, the market expects a new era for Hong Kong stablecoins, led by legacy banks.