In a landmark decision, Hong Kong has issued its first stablecoin licenses to two prominent banking institutions, HSBC and Anchorpoint Financial, a joint venture led by Standard Chartered and backed by Animoca Brands, on Friday. This move marks the first batch of approvals under the Stablecoins Ordinance, which became effective in August 2025.
According to Eddie Yue, Chief Executive of the Hong Kong Monetary Authority, the regulatory body is looking forward to seeing the licensed issuers launch their business operations, explore growth opportunities, and effectively manage risks. The approval of these licenses is expected to address pain points in financial and economic activities, create value for individuals and businesses, and support the development of digital assets in Hong Kong.
The Hong Kong Monetary Authority assessed 36 applications and signaled that the initial round of approvals would be limited, prioritizing risk management, reserve quality, and anti-money-laundering controls. By licensing note-issuing banks first, the regulator appears to be taking a deliberate approach. The decision reflects the historical context of Hong Kong's banking system, where commercial banks have been authorized to print banknotes since 1846.
Today, each note-issuing bank deposits US dollars with the government's Exchange Fund and receives Certificates of Indebtedness in return, against which it prints banknotes. In a blog post, Eddie 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.
The licenses come with one of the world's strictest Know-Your-Customer (KYC) frameworks for digital money, requiring licensed stablecoins to be transferred only to wallets whose owners have undergone identity verification. The travel rule applies to transfers exceeding HK$8,000 (~$1,000). In practice, 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. This approach makes them structurally different from freely transferable tokens like USDT or USDC.
The bank-led stablecoin model also reflects the Hong Kong Monetary Authority'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 key focus area, with Standard Chartered CEO Bill Winters suggesting that they could lay the foundation for a new era of digital trade settlement. Whether the market will embrace this vision remains to be seen, as stablecoins are a roughly $310 billion asset class dominated by USD-denominated tokens. The question is whether regulated, bank-issued HKD stablecoins can carve out a role in regional trade settlement and build the necessary network effects to compete.