In a landmark move, Hong Kong has issued its inaugural stablecoin licenses 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), represent the first batch under the Stablecoins Ordinance, which came into effect in August 2025. According to HKMA Chief Executive Eddie Yue, the authority looks forward to the licensed issuers launching their operations as planned, while effectively managing associated risks and exploring growth opportunities.
Yue expressed hopes that the promotion of regulated stablecoins will address existing challenges 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 evaluated 36 applications and, as anticipated, the initial round of approvals was limited. Financial Secretary Paul Chan had indicated in his February budget address that only a small number of licenses would be granted, with the regulator prioritizing robust risk management, high-quality reserves, and stringent anti-money-laundering controls.
The decision to initially license note-issuing banks, such as HSBC and Standard Chartered, appears to be a deliberate move. These two institutions are among the three commercial banks authorized to print Hong Kong dollar banknotes, a privilege dating back to 1846 when private banks began issuing currency 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 back the issuance of banknotes.
In a blog post published in December 2023, Yue drew parallels between pre-1935 banknotes issued by commercial banks in exchange for deposited silver and stablecoins, describing both as forms of private money that serve as a medium of exchange. The newly licensed stablecoins will operate under one of the world's most stringent Know Your Customer (KYC) frameworks for digital money. Under the HKMA's anti-money-laundering guidelines, licensed stablecoins can only be transferred to wallets whose owners have undergone identity verification.
Furthermore, the travel rule applies to transfers exceeding HK$8,000 (~$1,000). In practice, this means that Hong Kong dollar (HKD) stablecoins will likely embed compliance checks into their smart contracts, restricting transfers to wallets listed on an on-chain white list, making them distinct 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 and found a weak retail case. The focus on stablecoins marks a shift in priorities, 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. However, it remains to be seen whether the market will embrace this development.
The stablecoin market, currently valued at approximately $310 billion, is dominated by USD-denominated tokens. Data from CoinGecko shows that the largest stablecoins by market capitalization are pegged to the US dollar, 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 niche in regional trade settlement, issued by established institutions under strict constraints and utilizing new infrastructure. The question is whether a non-dollar stablecoin, despite being tightly regulated, can build the necessary network effects to compete.