In a notable development, Hong Kong has issued its first licenses for stablecoin issuers to HSBC and Anchorpoint Financial, a joint venture led by Standard Chartered that includes Animoca Brands, as announced on Friday. The approvals, made by the Hong Kong Monetary Authority (HKMA), the territory's central bank, represent the first batch of licenses granted under the Stablecoins Ordinance. HKMA Chief Executive Eddie Yue expressed his expectations, stating, "We look forward to the issuers launching their businesses according to plan, exploring growth opportunities while properly managing risks." He further emphasized the potential benefits of regulated stablecoins in addressing pain points in financial and economic activities, creating value for both individuals and businesses, and supporting the healthy development of digital assets in Hong Kong.
The HKMA received 36 applications and had indicated that the initial round of approvals would be limited. Financial Secretary Paul Chan had mentioned in his February budget address that only a small number of applicants would be approved, with the regulator prioritizing risk management, reserve quality, and anti-money-laundering controls. The decision to license the city's note-issuing banks first appears to be a deliberate move.
HSBC and Standard Chartered are two of the three commercial banks authorized to print Hong Kong dollar banknotes, a system that dates back to 1846. Today, each note-issuing bank deposits U.S. dollars with the government's Exchange Fund at a fixed rate and receives Certificates of Indebtedness in return, against which it prints banknotes. In a blog post, Yue drew parallels between pre-1935 banknotes issued by commercial banks in exchange for deposited silver, which he described as a form of "private money," and stablecoins, which function as their blockchain-based equivalent.
The licenses come with one of the world's strictest Know Your Customer (KYC) frameworks for digital money. Under the HKMA's Anti-Money Laundering (AML) guidelines, licensed stablecoins can only be transferred to wallets whose owners have been identity-verified, with the travel rule applying to transfers above HK$8,000. This means that HKD stablecoins will likely embed compliance checks into their smart contracts, restricting transfers to wallets listed in an on-chain white list. The bank-led stablecoin model reflects the HKMA's decision to deprioritize its central bank digital currency for retail use, following an 11-group pilot program that found the retail case to be weak.
Standard Chartered CEO Bill Winters has stated that Hong Kong's push into stablecoins and tokenized deposits could lay the foundation for a new era of digital trade settlement. However, it remains to be seen whether the market will agree.
With stablecoins being a roughly $310 billion asset class, dominated by USD-denominated tokens, Hong Kong is betting that regulated, bank-issued HKD stablecoins can carve out a role in regional trade settlement. The question is whether a non-dollar stablecoin, however tightly regulated, can build the necessary network effects to compete.