tl;dr
On August 1, Hong Kong’s Stablecoin Ordinance took effect, introducing licensing guidelines for stablecoin issuers covering capital, custody, KYC, reserves, and governance. Leading banks like BOCHK and Standard Chartered benefit from regulatory advantages. Stablecoins must be fully fiat-backed with ...
On August 1, Hong Kong’s Stablecoin Ordinance officially came into effect, marking a significant regulatory milestone. The Hong Kong Monetary Authority (HKMA) issued comprehensive licensing guidelines detailing capital, custody, KYC, reserves, and governance requirements for stablecoin issuers.
Leading the charge are prominent banknote-issuing banks such as BOCHK and Standard Chartered, which enjoy regulatory and institutional advantages under Hong Kong’s currency framework. A critical mandate requires that each stablecoin maintains full fiat backing under stringent bank custody. The HKMA plans to grant only a limited number of licenses in the first batch, urging applicants to submit by September 30 to be considered. Failure to apply within three months post-enforcement risks shutdown by November.
Application preparations are well underway among a diverse group of players — including state-owned enterprises, sandbox participants, and fintech giants. Success in securing licenses will hinge on demonstrating viable real-world use cases such as asset tokenization, cross-border payment solutions, and crypto trading services. These application scenarios will largely influence regulatory approvals.
Securities firms are expected to initially emphasize stablecoin trading, custody, and consulting services while exploring tokenized asset portfolio offerings. To date, 44 brokers have upgraded their Type 1 licenses, signaling a competitive rush among Hong Kong’s leading brokerage firms to obtain crypto licenses and maintain their edge in digital finance. Notably, major Chinese brokers like Guotai Junan and Eastmoney have already advanced their licenses.
Hong Kong regulators have issued cautionary notes warning about the persistence of hype and speculative risks despite tighter regulation. Investors are urged to rigorously assess asset backing and project viability, given that concept tokens lacking substantive support may still surface.
In addition, some firms are innovating with CNH-backed stablecoins tailored for cross-border payment applications. Highlighting this trend, China Asset Management Company (Hong Kong) introduced several tokenized funds this year. Their Hua Xia RMB Digital Currency Fund became the first on-chain offshore RMB fund, marking a landmark exploration into offshore RMB stablecoin potentials as observed by industry experts.