In a landmark decision, Hong Kong has issued its first stablecoin licenses to two prominent financial institutions: HSBC and Anchorpoint Financial, a joint venture led by Standard Chartered and including Animoca Brands. This move, announced on Friday, marks the initial batch of approvals under the Stablecoins Ordinance, which came into effect in August 2025. According to Eddie Yue, Chief Executive of the Hong Kong Monetary Authority (HKMA), the regulator is looking forward to the issuers launching their operations in line with their plans, while effectively managing associated risks.
Yue emphasized the potential of regulated stablecoins to address existing pain points in financial and economic activities, create value for both individuals and businesses, and support the healthy development of digital assets in Hong Kong. The HKMA carefully evaluated 36 applications before making its decision, prioritizing robust risk management, high-quality reserves, and stringent anti-money-laundering controls. The choice to license the city's note-issuing banks first appears to be a deliberate move, given the historical significance of these institutions in Hong Kong's financial landscape.
HSBC and Standard Chartered are two of the three commercial banks authorized to print Hong Kong dollar banknotes, a privilege that dates back to 1846. Today, these banks deposit U.S.
dollars with the government's Exchange Fund at a fixed rate and receive Certificates of Indebtedness in return, which they use to back their banknote issuance. In a blog post from December 2023, Yue drew parallels between the historical context of private banks issuing currency backed by silver deposits and the modern concept of stablecoins, which serve as blockchain-based equivalents with stable value.
The licenses granted by the HKMA come with one of the world's most stringent Know Your Customer (KYC) frameworks for digital money, requiring licensed stablecoins to be transferred only to wallets whose owners have undergone identity verification. Furthermore, the travel rule applies to transfers exceeding HK$8,000 (~$1,000), which means that HKD stablecoins will likely incorporate compliance checks into their smart contracts, restricting transfers to wallets listed on an on-chain white list. This approach differs significantly from freely transferable tokens like USDT or USDC. The bank-led stablecoin model also reflects the HKMA's decision to deprioritize its central bank digital currency (CBDC) for retail use, following an 11-group pilot program that concluded in October with findings that the retail case was weak.
Instead, stablecoins have become a focal point, with Standard Chartered CEO Bill Winters suggesting that Hong Kong's push into stablecoins and tokenized deposits could lay the foundation for a new era of digital trade settlement. The market's response to this development remains to be seen, given that stablecoins are a roughly $310 billion asset class dominated by USD-denominated tokens. Data from CoinGecko indicates that the largest stablecoins by market capitalization 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, issued by the same institutions under the same constraints but on new rails. The key question is whether a non-dollar stablecoin, however tightly regulated, can build the necessary network effects to compete in the market.