In a landmark move, Hong Kong has issued its first stablecoin licenses to two prominent financial institutions: HSBC and Anchorpoint Financial, a joint venture led by Standard Chartered that includes Animoca Brands. This development marks the first batch of approvals under the Stablecoins Ordinance, which was implemented in August 2025.
According to Eddie Yue, Chief Executive of the Hong Kong Monetary Authority, the regulator is looking forward to the licensed issuers launching their businesses and exploring growth opportunities while effectively managing risks. Yue expressed hopes that the promotion of regulated stablecoins will address pain points in financial and economic activities, create value for individuals and businesses, and support the healthy development of digital assets in Hong Kong.
The Hong Kong Monetary Authority assessed a total of 36 applications and had indicated that the initial round of approvals would be limited. Financial Secretary Paul Chan had previously stated that only a small number of licenses would be granted, with the regulator prioritizing risk management, reserve quality, and anti-money-laundering controls.
The decision to license note-issuing banks first appears to be a deliberate move, as HSBC and Standard Chartered are two of the three commercial banks authorized to print Hong Kong dollar banknotes. This system dates back to 1846, when private banks began issuing currency backed by silver deposits in the absence of a colonial central bank. 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 the historical context of banknotes and the current landscape of stablecoins, highlighting their potential as a medium of exchange on-chain. The licenses come with one of the world's strictest Know-Your-Customer 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. 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, making them distinct from freely transferable tokens. The bank-led stablecoin model also reflects the Hong Kong Monetary Authority'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.
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. However, it remains to be seen whether the market will embrace this development.
Stablecoins are a significant asset class, with a value of approximately $310 billion, and USD-denominated tokens dominate the market. 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.