In a groundbreaking move, Hong Kong has issued its inaugural stablecoin licenses to two prominent financial institutions: HSBC and Anchorpoint Financial, a joint venture led by Standard Chartered and including Animoca Brands. This development follows the implementation of the Stablecoins Ordinance in August 2025.
According to Eddie Yue, Chief Executive of the Hong Kong Monetary Authority (HKMA), the regulatory body is eager to see the licensed issuers initiate their operations, capitalize on growth opportunities, and effectively manage associated risks. Yue expressed his hope that the promotion of regulated stablecoins will address existing pain points in financial and economic activities, generate value for individuals and businesses, and contribute to the healthy development of digital assets in Hong Kong. The HKMA evaluated 36 applications and had indicated that the initial round of approvals would be limited, with a focus on risk management, reserve quality, and anti-money-laundering controls. The decision to prioritize the city's note-issuing banks, such as HSBC and Standard Chartered, appears to be a deliberate move.
These banks have a long history of issuing currency, dating back to 1846 when private banks began issuing notes backed by silver deposits. 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, which are used to print banknotes.
In a blog post, Yue drew parallels between the historical context of private money and the modern concept of stablecoins, highlighting their potential as a medium of exchange on blockchain platforms. The licenses granted by the HKMA come with stringent Know-Your-Customer (KYC) requirements, considered one of the world's strictest frameworks for digital money. Licensed stablecoins can only be transferred to wallets whose owners have undergone identity verification, and the travel rule applies to transactions exceeding HK$8,000.
This means that Hong Kong dollar (HKD) stablecoins will likely incorporate compliance checks into their smart contracts, restricting transfers to wallets listed in 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 found the retail case to be 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, as stablecoins are a $310 billion asset class dominated by USD-denominated tokens.
Hong Kong is betting on regulated, bank-issued HKD stablecoins to carve out a role in regional trade settlement, but it remains uncertain whether a non-dollar stablecoin can build the necessary network effects to compete.