Starting from August 1, 2025, the Hong Kong Monetary Authority (HKMA) has opened up applications for stablecoin issuance licenses, marking a new phase in the formal implementation of stablecoins in the Hong Kong region.

This policy has been brewing for a long time. Over the past year, the HKMA has been promoting sandbox testing of stablecoin use cases, gradually clarifying regulatory guidance and application pathways. Now, participating institutions will transition from testing to issuing and circulating under the formal regulatory framework.

According to incomplete statistics, dozens of institutions have indicated they will apply for a stablecoin license. Meanwhile, more local banks, tech companies, and Web3 teams are further preparing around clearing systems, custody mechanisms, and payment interfaces.

This article will continue to track the latest news related to Hong Kong stablecoins for practitioners to refer to.

Hong Kong Stablecoin Regulatory Progress

I. Formal Implementation of Regulatory System

The Stablecoin Regulation will officially take effect on August 1, 2025.

The HKMA will simultaneously publish four related documents (English versions only):

· Licensed Stablecoin Issuer Regulatory Guidance Consultation Summary and Formal Guidance

· Anti-Money Laundering and Counter-Financing of Terrorism Guidance (Applicable to Licensed Stablecoin Issuers) Consultation Summary and Formal Guidance

· Summary of the Stablecoin Issuer Licensing Regime

· Summary of Transitional Provisions for Existing Stablecoin Issuers

II. Licensing Process and Requirements

The HKMA will accept applications for the first round of stablecoin issuer licenses from August 1 to September 30, 2025.

Institutions intending to apply are encouraged to proactively contact the HKMA via official email by August 31 to communicate regulatory expectations and feedback.

The HKMA reminds market participants: Public communications must be cautious and should not falsely claim to have been licensed or in the application process, as that would be illegal.

III. Application Conditions and Compliance Requirements

All Hong Kong compliant stablecoin holders must undergo identity verification, equivalent to real-name authentication.

HKMA Assistant Chief Executive (Regulation and Anti-Money Laundering) Eric Chan stated that this regulation is stricter than the previous "whitelist" system; in the future, there may be opportunities for relaxation as technology matures.

Legislative Council member John Wu added: The HKMA does implement KYC, and real-name verification is one possible method. The specific plan will be proposed by the issuer and confirmed after review by the HKMA.

IV. HKMA's Stance on Fiat-Linked Stablecoins

HKMA Deputy Chief William Chan stated:

· Entities can apply for a stablecoin license pegged to a single fiat currency,

· Or they can apply for a stablecoin license pegged to a basket of fiat currencies,

· But the application must specify the currency/currencies.

William Chan also emphasized: The licensing threshold is very high, and the first license is expected to be issued early next year.

V. Transition Arrangements and Classification after Implementation of Stablecoin Regulations

After the implementation of the "Stablecoin Regulation," there will be a 6-month transition period, during which the HKMA will categorize existing issuers:

· Those meeting regulatory requirements: Eligible for a temporary license;

· Those not meeting standards within 3 months: Must cease operations within 4 months;

· Those not meeting the criteria: Must cease operations within 1 month of receiving a notice.

Requirements include: full reserve, redemption within 1 day, presence in Hong Kong, maintaining financial resources, KYC, transaction monitoring, etc.

Violators will face penalties such as fines, suspension, or revocation of the license.

Latest Statements from Hong Kong Policy Makers on Stablecoins

As the "Stablecoin Regulation" is set to be officially implemented on August 1, 2025, the Hong Kong government and related agencies have intensively released policy signals regarding stablecoins on various occasions. These statements cover not only regulatory logic and licensing mechanisms but also key issues such as linked currencies, implementation scenarios, and risk management, gradually outlining the operational framework of the Hong Kong stablecoin regulatory system.

I. Stablecoins are Not Speculative Tools but Financial Infrastructure

Among all public statements, a position that has been repeatedly emphasized is: Stablecoins should not become tools for market speculation.

On July 20, at the annual report press conference of the Hong Kong Monetary Authority, Chairman Norman Hung stressed that stablecoins should play their "stability" role, emphasizing that asset market digitalization is a long-term game plan and should not be viewed with short-term vision. He also stated that different assets will be "tokenized" in the future, but this process will not be completed within 24 hours, and the entire financial system should not be expected to be "fully on-chain" in the short term.

The Director of Financial Affairs and Treasury, Christopher Hui, has reiterated similar views publicly multiple times in the past few months. He believes that stablecoins should be seen as a financial development tool to improve financial efficiency, rather than a means of making money. On June 29, he stated that the government will adhere to clear regulatory principles and require issuers to have capital, reserve mechanisms, and redemption capabilities to prevent systemic risks and safeguard monetary sovereignty.

The Financial Secretary, Paul Chan, has also pointed out in several articles that stablecoins possess programmable characteristics that can be used for automated payments and the restructuring of financial service processes, but their development should not lose sight of the needs of the real economy. He emphasized: "It's not just about pursuing technology, and certainly not about a tool frenzy."

Voice from central think tanks has also highlighted the macro background of stablecoins. On June 21, Li Yang, Chairman of the National Finance and Development Laboratory, stated that stablecoins are essentially an on-chain extension of the US dollar, serving as a tool for the US to promote the digitalization of the dollar's dominance. China should take advantage of this trend to promote the internationalization of the renminbi and consider developing a complementary mechanism between the renminbi stablecoin and central bank digital currency.

II. Tightening of Licensing Regime, High Application Threshold

Hong Kong's stablecoin regulatory regime will adopt a high-standard review mechanism. On July 30, Eddie Yue, Deputy Chief Executive of the Monetary Authority, clearly stated at a technical briefing that the licensing threshold is "very high." In the initial stage, a large number of licenses will not be issued at once; instead, they will be assessed one by one based on the quality of the application materials. The first license is expected to be issued in early next year.

Norman Chan, Chief Executive of the Monetary Authority, pointed out in a previous article that the compliance requirements facing stablecoin issuers are nearly equivalent to those of financial institutions such as e-wallets and banks, whether in terms of asset reserve management, redemption policies, or anti-money laundering mechanisms. Only a "small number of licenses" will be issued initially, with a focus on evaluating the issuer's business plan, actual scenarios, reserve capabilities, and technological security.

Christopher Hui has repeatedly emphasized that issuers must "complete redemptions within one day" after user initiation, while also establishing stable mechanisms and customer asset segregation mechanisms to fully implement anti-money laundering and counter-terrorism financing regulations.

III. Cross-border Settlement Takes Precedence in Use Cases, followed by Web3

Compared to narratives emphasizing "on-chain" or "DeFi-ization," the policy level's positioning of stablecoins has always been centered on cross-border payments and clearing systems.

Eddie Yue stated that the initial batch of stablecoins will mainly focus on cross-border trade settlements and Web3 scenario testing. He also emphasized that sandbox participation is not a prerequisite for licensing, and even institutions that have entered the testing scope do not necessarily mean they will obtain formal licenses in the future.

Xu Zhengyu mentioned in an interview that stablecoins can serve as a substitute payment method for local currency volatility in the "Belt and Road" region, especially suitable for scenarios where the forex market is underdeveloped, such as infrastructure projects and engineering contracts.

Chen Maobo stated that Hong Kong will continue to promote the tokenization of financial assets, gradually introducing token settlement mechanisms in markets such as green bonds, ETFs, and metal commodities, and establishing a bridge between transaction currency and on-chain assets through stablecoins.

IV. Opening of Fiat Anchor Mechanism, Caution Needed for RMB Stablecoin

Regarding the arrangement of the pegged currency, policymakers explicitly stated that the Hong Kong regulatory framework is designed to be open.

On July 30, Chen Weimin stated that applicants can choose to anchor a specific fiat currency or a basket of fiat currencies, and they just need to declare it clearly at the time of application.

Previously, Xu Zhengyu had also mentioned the possibility of a "RMB stablecoin" multiple times. He pointed out that there is no legal prohibition on anchoring the RMB, but if it involves exchange rate management and macroeconomic policies, communication and coordination with mainland relevant institutions are required. "Hong Kong has legal space, but if we want to do it, we must consider the exchange rate and monetary policy of the whole country."

Chen Maobo also pointed out in a directorate essay that allowing the use of different fiat currencies as anchoring assets is conducive to attracting more international institutions to issue stablecoins in Hong Kong based on their actual application scenarios.

V. Cautionary Reminders to Investors and the Public

While promoting institutional development, several policymakers have also issued cautious reminders about market enthusiasm.

Legislative Council Member Wu Jiezhuang stated that Hong Kong has ample room to develop stablecoins and will become a landing experimental field for the integration of finance and the real economy. However, he particularly reminded that in the face of emerging asset classes, retail investors should remain vigilant, not blindly follow the trend, and fully understand the product risks.

The HKMA has also issued a notice, reminding the public to beware of stablecoin projects or individuals claiming to be "licensed" or "in the process of applying for a license" without authorization, emphasizing that if the public holds unlicensed stablecoins, they must bear the related risks themselves.

How Is the Market Viewing Hong Kong's Stablecoin Regulation?

With the imminent implementation of the Hong Kong "Stablecoin Act," discussions at the market level have intensified around issues such as issuance pace, scenario paths, the possibility of RMB anchoring, etc. Voices from securities firms, fund companies, foreign investment banks, and the media are gradually revealing the market's structural expectations and potential impacts of this regulatory framework.

I. Issuance Pace and Expectations for Initial Licensed Institutions

On July 30, Citic Securities released a research report stating that the "Stablecoin Issuer Licensing Regime Summary Explanation" will become the most valuable official document for reference in the current application stage. The report predicts that the number of initial stablecoin licenses will be "only single digits," with the earliest expected to be approved by the end of the year. The Hong Kong Monetary Authority encourages institutions to contact regulators by August 31, with the official application deadline set for September 30.

The report suggests focusing on two main threads: first, issuers with a clear likelihood of licensing approval; and second, platform companies that have identified stablecoin usage scenario construction.

Gan Tian, CEO of Huaxia Fund (Hong Kong), views the current stage as a "critical point where the basic rules have been established, and scenario trials are awaiting initiation." He revealed that Huaxia Fund has participated in the Hong Kong stablecoin sandbox testing and is exploring an integrated path for payments, subscriptions, and asset management. He believes that whoever can first establish a closed loop of "compliance + implementation + asset connection" in the future may become a leading force in the stablecoin market.

II. Regulatory Path and the Concept of "Dual-track Parallelism" with the Hong Kong Dollar/Chinese Yuan

On July 23, Ping An Securities released a report stating that Hong Kong may form a dual-track regulatory framework of "USD Stablecoin Docking with the International Market + HKD Stablecoin Connecting with the Mainland." On the one hand, it continues to attract USD-dominant projects to enter Hong Kong; on the other hand, it reserves institutional space for the internationalization of the renminbi.

The report points out that Hong Kong's definition of stablecoins is not limited to a particular fiat currency type, and the future market share of non-USD stablecoins may increase. Current Hong Kong stablecoin regulations have brought overseas projects with "partial anchoring to the Hong Kong dollar" under regulatory oversight.

Xiao Feng, Chairman of HashKey Group, stated in an interview that Hong Kong stablecoin licenses will not be limited to Hong Kong dollar pegging, and the pegged currency and deployment of public blockchain networks will be determined by the issuer. He mentioned that networks like Ethereum and Solana could serve as the foundational infrastructure for deploying Hong Kong stablecoins.

III. Policy Expectations and Financial Function Concepts of CNH Stablecoins

Since June, the discussion about whether the "Offshore Renminbi Stablecoin (CNH Stablecoin)" will pioneer in Hong Kong has become a market focus.

Morgan Stanley pointed out that the Hong Kong stablecoin regulations have "laid the first legal path" for CNH stablecoins. Supported by an offshore RMB liquidity pool of about 1 trillion yuan, CNH stablecoins can validate cross-border settlement feasibility without violating mainland capital controls, serving as a supplementary payment channel beyond CIPS and SWIFT.

Xing Ziqiang, Chief Economist of Morgan Stanley China, stated that Hong Kong should first promote stablecoins pegged to the US dollar and Hong Kong dollar to establish a technical and market trust foundation, and then gradually introduce CNH stablecoins to enhance the renminbi's position in the digital payment system.

The Nikkei Asian Review article states that Hong Kong could serve as a "pioneer for experimentation" to promote the implementation of a CNH stablecoin to address the competition for international payment dominance. However, a prerequisite is the proper handling of regulatory requirements such as anti-money laundering and counter-terrorism financing.

In a commentary, China Economic Observer pointed out that if a CNH stablecoin were to pilot in Hong Kong, it would establish a Renminbi channel independent of the SWIFT system and open up a new digital path for Renminbi internationalization. This exploration could be another institutional leap forward following the RMB Cross-border Payment System in 2009.

Wang Yongli, former vice president of the Bank of China, also wrote that the United States is strategically developing USD stablecoins through legislation, and China should respond proactively. With its advanced stablecoin regulatory framework, Hong Kong is well positioned to pilot CNH stablecoins, particularly for overseas cryptocurrency trading and clearing.

IV. Financial Market Impact and Capital Focus

Guosen Securities stated in a report on June 3 that while the Hong Kong stablecoin proposal is still in its early stages, it will bring short-term structural investment opportunities, mainly focusing on digital currency, cross-border payments, blockchain, RWA, and other sectors. The report believes that if policies explicitly support a Renminbi-anchored stablecoin, certain A-share companies will benefit from the compliant value unlocked by the "Hong Kong Bridge Channel."

However, Guosen Securities also pointed out that due to the current strict regulation of domestic virtual assets, the probability of large-scale incremental funds entering the market remains low.

Ping An Securities further emphasized that as global stablecoin regulation gradually takes shape, there is potential to drive the establishment of a unified international regulatory framework. China needs to seize the institutional window, explore a controllable path through Hong Kong, and avoid being monopolized in the digital asset field by USD stablecoins.

Media outlets such as CCTV's Dialogue and Securities Times have also published commentary, suggesting that the United States promoting digitalization through stablecoins is a new form of financial expansion. If China remains absent in stablecoin development for an extended period, it may passively respond to a new settlement network dominated by the US dollar.

Who Is Preparing to Apply for a Hong Kong Stablecoin License?

With the "Stablecoin Regulation" set to take effect on August 1, 2025, several companies are accelerating their entry pace, preparing for or announcing applications for stablecoin issuer licenses. These participants come from various industry backgrounds, including financial institutions, technology platforms, payment companies, and blockchain startups, reflecting the diverse response sparked by the establishment of the Hong Kong stablecoin regulatory system.

Overall Market Entry Heat

As of July 14 report, approximately 50 to 60 companies are considering applying for a Hong Kong stablecoin license.

· About half of them are payment institutions, and the other half are well-known internet companies;

· Most have Chinese background;

· It is expected that only 3–4 licenses will be issued in the initial stage, with stablecoins initially pegged to the Hong Kong dollar and the US dollar.

List of Sandbox Pilot Institutions (Announced on July 18, 2024)

The following 5 institutions are participating in the stablecoin issuer sandbox testing:

1. JD Coin Chain Technology (Hong Kong) Limited

2. CircleCoin Innovation Technology Limited

3. Standard Chartered Bank (Hong Kong) Limited

4. AN Corporation Limited

5. Hong Kong Telecom (HKT) Limited

Enterprises Explicitly Stating They Will Apply for or Are Applying for Licenses

· China 33 Media
Announced on July 15 that it plans to apply for a Hong Kong stablecoin license, with funds coming from share placement and cash reserves.

· Tiansheng Capital
Announced on July 11 that it plans to establish a digital asset trading and remittance company and apply for a stablecoin license. It plans to use the stablecoin for art transactions and remittance services, focusing on cross-border trade settlement.

· MultiPoint Digital
Announced on July 3 that it is preparing to apply for a Hong Kong stablecoin license.

· Animoca Brands + Standard Chartered Bank (Hong Kong) + Hong Kong Telecom
Have repeatedly stated that they will jointly establish a joint venture, apply for a license, and issue a Hong Kong dollar stablecoin. The stablecoin will be used in scenarios such as game virtual asset trading, cross-border trade, and financial settlement.

· JD.com
Has publicly announced on its website that it will issue a stablecoin pegged 1:1 to the Hong Kong dollar in Hong Kong. The issuer is JD Coin Chain Technology (Hong Kong), and it has also been selected as a participant in the HKMA stablecoin "sandbox."

· Ant Group International
According to sources, the company will immediately apply for an issuer license once the Hong Kong "Stablecoin Ordinance" comes into effect, and it also plans to seek permits in Singapore and Luxembourg.

· LianLian Digital
According to sources, LianLian Digital is actively exploring applying for stablecoin licenses in Hong Kong and Singapore. Its subsidiary, DFX Labs, has already obtained a virtual asset trading platform license issued by the Hong Kong Securities and Futures Commission.

Companies Researching, Monitoring, or Venturing into Relevant Businesses

· Ping An of China
On July 21st, responded on an interactive platform that it has taken note of the regulatory changes regarding stablecoins in Hong Kong, maintaining a high level of attention and actively researching the matter.

· Sansec
On June 30th, stated that the company has been involved in relevant businesses such as virtual currencies and stablecoins in the Hong Kong area. As a cryptographic infrastructure provider, it will provide security support for related projects.

Clarifications

· Octopus Holdings
was previously rumored to be involved in a stablecoin accelerator project. The company later clarified that it only participated in an exploratory program led by Brinc in an "advisory capacity." The nature of this involvement was conceptual research and not related to stablecoin product development or formal collaboration.

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