Hong Kong to Begin Issuing Stablecoin Licenses — But Approvals Will Remain in Single Digits This Year

What’s Unfolding:

The Hong Kong Monetary Authority (HKMA) and Financial Services and Treasury Bureau are set to begin reviewing applications for fiat-backed stablecoins once the Stablecoins Ordinance comes into force on August 1. Despite the new legal framework enabling issuers, sources indicate authorities will issue only a few licenses this year to ensure strict oversight.

New Licensing Regime Drives Oversight:

Legislation approved in late May explicitly mandates that any entity issuing or marketing a fiat-referenced stablecoin—particularly those pegged to the Hong Kong dollar—must obtain a license from the HKMA. The new law includes standards for reserve backing, redemption rights, segregation of funds, and AML/CFT compliance.

In parallel, the HKMA has launched sandbox programs and consultation processes to help issuers prepare for the full regime.

Market Response & Industry Readiness:

Major fintech firms are already preparing. For example, Ant International—an affiliate of Alibaba—confirmed it will apply for a stablecoin issuer license in Hong Kong (and possibly Singapore and Luxembourg) once the licensing window opens. Similarly, Chinese tech giants like JD.com and Ant Group are reportedly lobbying for yuan-pegged tokens to support international trade and promote digital yuan adoption in the region.

Why This Matters:

• Regulatory Clarity: Hong Kong joins global peers including the EU, UK, Singapore, and the U.S. in establishing clear stablecoin frameworks—a critical structure for institutional participation.
• Limited Rollout: Issuing only a few licenses initially helps regulators ensure compliance and market stability before expanding.
• Regional Innovation Hub: The city’s framework positions it as a leading stablecoin centre in Asia—even potentially enabling yuan-backed tokens in future phases.

Final Take:

Hong Kong’s careful entry into licensed stablecoin issuance reflects a hybrid strategy: bold from a policy perspective, yet cautious in execution. As firms like Ant International prepare for applications and sandbox trials mature, the city's digital asset environment is entering a new—and carefully controlled—phase.

For global crypto players, the message is clear: Hong Kong is open for stablecoin business—but approval is selective, compliance is mandatory, and only a few pioneers will lead the way this year.