The Hong Kong Monetary Authority (HKMA) is approving HSBC Holdings and Standard Chartered as the first licensed stablecoin issuers in Hong Kong. Crypto exchange OSL will also receive a license alongside the two major banks. In total, 36 formal applications were received. Yet the authority is initially approving only three to four.
Insiders cited by Bloomberg say the official announcement is expected no earlier than March 24. This positions Hong Kong as one of the first jurisdictions worldwide to authorize banks to issue stablecoins. As a result, a third major regulatory hub for digital payment instruments is now emerging alongside the US with the GENIUS Act and the EU with MiCA.
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Banks over crypto firms: HKMA's strategy for systemic stability
According to industry sources, the HKMA favors bank-led issuers. The reason: strong capitalization and lower systemic risk. HSBC is Hong Kong's largest bank by total assets. Still, its inclusion in the first round comes as a surprise to market observers. HSBC did not participate in the HKMA's 2024 sandbox program, unlike Standard Chartered.
Standard Chartered is pursuing a different path. The bank's Hong Kong unit formed a joint venture called Anchorpoint Financial with Animoca Brands and Hong Kong Telecommunications (HKT). This consortium plans to issue a Hong Kong dollar-denominated stablecoin. Meanwhile, Standard Chartered was already among the 2024 sandbox participants, together with JINGDONG Coinlink Technology (a JD.com subsidiary) and RD InnoTech.
Finance Secretary Paul Chan made it clear in February that the first round would be deliberately small:
"A small number [of licenses will be approved]to ensure stablecoins have real use cases and issuers maintain sustainable business models with strong regulatory compliance." - Paul Chan, Finance Secretary of Hong Kong
Strict requirements under the Stablecoins Ordinance
The Stablecoins Ordinance forms the regulatory foundation. Hong Kong's Legislative Council passed the law on May 21, 2025. It took effect on August 1, 2025. Consequently, Hong Kong is now one of the first major financial centers, alongside the US and the EU, with a dedicated stablecoin regulatory framework.
Requirements are strict. Issuers must demonstrate paid-up share capital of at least HKD 25 million. However, banks as authorized institutions are exempt from this rule. At the same time, a full backing obligation applies. The market value of reserves must at all times equal the face value of all stablecoins in circulation. Reserves may consist exclusively of High Quality Liquid Assets (HQLA). Hong Kong is among the first jurisdictions with this stringent requirement.
In addition, the law mandates redemption at face value within one business day (T+1). Issuers must therefore maintain sufficient liquidity at all times. The application deadline expired on September 30, 2025.
Hong Kong's bid to become a digital asset hub
These stablecoin licenses fit into a broader strategy. Since 2022, Hong Kong has pursued a series of regulatory measures to position itself as a global crypto center. Beyond the stablecoin regime, the city also introduced a licensing system for crypto exchanges (VASP).
Licensed stablecoins are set to receive preferential treatment on local exchanges. This effectively creates a regulatory whitelist for domestic settlements. Accordingly, the policy approach emphasizes real-world use cases: payments, trade finance, and tokenized assets. In 2024, sandbox scenarios included e-commerce payments, cross-border trade settlements, and tokenized asset trading.
Global race for stablecoin regulation
Hong Kong's push comes during a phase of regulatory convergence. In July 2025, the US signed the GENIUS Act into law, mandating 1:1 backing with liquid assets. Meanwhile, the EU has relied on the MiCA framework since December 2024, classifying stablecoins into Asset-Referenced Tokens and E-Money Tokens. Singapore, the United Arab Emirates, and Japan also require full reserve backing and licensed issuers.
The global stablecoin market is growing rapidly. Total market capitalization stood at roughly $309 billion in January 2026. Transfer volume reached approximately $33 trillion in 2025. Citi's base case projects a market cap of $1.9 trillion by 2030. The optimistic scenario reaches up to $4 trillion. More than 232 million users worldwide now hold stablecoins.
Other major banks are also pushing into the market. JPMorgan expanded its JPM Coin to public blockchains. Societe Generale launched the EUR CoinVertible. In the US, a banking consortium comprising PNC, Citi, and Wells Fargo is exploring a joint stablecoin. Standard Chartered CEO Bill Winters described his bank's initiative as the foundation for a new digital trade settlement infrastructure.
