In a significant development for the financial sector, Hong Kong has awarded its inaugural stablecoin issuer licenses to HSBC and a Standard Chartered-led joint venture, Anchorpoint Financial, which includes Animoca Brands. This milestone decision, made by the Hong Kong Monetary Authority (HKMA), is the first batch of approvals under the Stablecoins Ordinance that came into effect in August 2025.
According to HKMA chief executive Eddie Yue, the issuers are expected to launch their businesses as planned while effectively managing associated risks. The introduction of regulated stablecoins is anticipated to address existing challenges in financial and economic activities, create value for both individuals and businesses, and support the healthy growth of digital assets in Hong Kong.
The HKMA evaluated 36 applications before making its decision, prioritizing risk management, reserve quality, and anti-money-laundering controls. By licensing note-issuing banks first, the regulator appears to be following a deliberate strategy. Notably, HSBC and Standard Chartered are among the three commercial banks authorized to print Hong Kong dollar banknotes, a privilege dating back to 1846. Today, these banks deposit U.S.
dollars with the government's Exchange Fund at a fixed rate and receive Certificates of Indebtedness, which they use to print banknotes. The HKMA's decision to issue licenses to these banks reflects the parallel between traditional banknotes and stablecoins, which serve as a medium of exchange with stable value. However, the licenses come with one of the world's strictest Know Your Customer (KYC) frameworks for digital money, requiring identity verification for wallet owners and imposing the travel rule for transfers exceeding HK$8,000. In practice, this means that HKD stablecoins will likely incorporate compliance checks into their smart contracts, restricting transfers to wallets on an on-chain white list.
This approach differs from freely transferable tokens like USDT or USDC. The bank-led stablecoin model also indicates the HKMA's decision to deprioritize its central bank digital currency (CBDC) for retail use, following an 11-group pilot program that found a weak retail case. Instead, stablecoins have become a key focus, with Standard Chartered CEO Bill Winters suggesting that they could lay the foundation for a new era of digital trade settlement. The success of this approach 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 is uncertain whether a non-dollar stablecoin can build the necessary network effects to compete.