Unregulated Hong Kong Stablecoins Emerge Amidst Regulatory Vacuum

The Hong Kong Monetary Authority has cautioned that fraudulent stablecoins are taking advantage of the city's new stablecoin framework, even before the introduction of the first officially licensed product. In an official statement, the HKMA revealed that tokens bearing the 'HKDAP' and 'HSBC' labels are being traded, but are not affiliated with any authorized issuer. The HKMA had previously granted stablecoin licenses to two applicants under the newly enacted Stablecoins Ordinance, which became effective in August 2025. These licenses were awarded to a small group of applicants, mirroring the existing banking system in which a select few commercial banks are authorized to issue currency. The HKMA has warned the public to be cautious of scams and to only rely on official communications from licensed issuers, as well as to conduct transactions through regulated channels. Industry insiders anticipate the launch of legitimate stablecoins to coincide with Hong Kong's fintech week in November.