In a landmark decision, Hong Kong has issued its first stablecoin licenses to HSBC and Anchorpoint Financial, a joint venture led by Standard Chartered that includes Animoca Brands, effective as of the latest announcement. The Hong Kong Monetary Authority, acting as the territory's central bank, has approved these licenses under the Stablecoins Ordinance, which came into effect in August 2025. HKMA Chief Executive Eddie Yue expressed his expectations, stating, "We anticipate the licensed issuers will commence operations in accordance with their plans, exploring growth opportunities while effectively managing associated risks. We are hopeful that the promotion of regulated stablecoins will address existing challenges in financial and economic activities, generate value for both individuals and businesses, and support the healthy development of digital assets within Hong Kong." Following the assessment of 36 applications, the HKMA has signaled that the initial round of approvals would be limited in scope.
Financial Secretary Paul Chan had previously indicated in his February budget address that only a select few would be approved, with the regulator prioritizing stringent risk management, high-quality reserves, and robust anti-money-laundering controls. The decision to initially license note-issuing banks appears to be a deliberate strategy. As two of the three commercial banks authorized to print Hong Kong dollar banknotes, HSBC and Standard Chartered have a long-standing history in the region, dating back to 1846 when private banks first began issuing currency backed by silver deposits. Currently, 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 then used to print banknotes. In a blog post published in December 2023, Yue drew parallels between historical banknotes and modern stablecoins, highlighting their roles as mediums of exchange. The newly licensed stablecoins are subject to one of the world's most stringent Know Your Customer (KYC) frameworks for digital money, as outlined in the HKMA's Anti-Money Laundering (AML) guidelines.
Licensed stablecoins can only be transferred to wallets whose owners have undergone identity verification, with the travel rule applying to transactions exceeding HK$8,000. This stringent framework implies that HKD stablecoins will likely incorporate compliance checks into their smart contracts, restricting transfers to wallets listed on an on-chain whitelist, thus differing significantly from freely transferable tokens.
The bank-led stablecoin model also reflects the HKMA's decision to deprioritize its central bank digital currency (CBDC) for retail use, following the completion of an 11-group pilot program in October that 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 groundwork for a new era in digital trade settlement. However, the success of these stablecoins in the market remains to be seen, given the dominance of USD-denominated tokens in the roughly $310 billion stablecoin asset class.
The question remains whether regulated, bank-issued HKD stablecoins can carve out a significant role in regional trade settlement and build the necessary network effects to compete.