Hong Kong Stablecoin Major Test "Results" Coming Soon: Which Platforms Can Successfully Make It Ashore?

Recently, the Hong Kong Monetary Authority and the Legislative Council have successively issued clear signals that the first batch of stablecoin licenses is entering the final review countdown, with expected to be officially issued before the end of March. Once the news broke, it instantly flooded the crypto community. It’s important to note that previously, the biggest confusion in the crypto world was the lack of clear regulations in the stablecoin sector—either operating without licenses at the risk of regulatory crackdowns or trying to enter the market without clear guidance, watching opportunities slip away helplessly.

Since the Stablecoin Ordinance took effect in Hong Kong in August 2025, the city has been actively advancing license approvals. The upcoming issuance of the first batch of licenses aims to address the chaos and regulatory ambiguity in the stablecoin industry by establishing clear procedures for license application, compliant operation, and risk management. Today, the Sister Sa team will discuss in detail: what is the current outlook for Hong Kong’s first stablecoin licenses? What practical effects will license issuance bring? What opportunities and pitfalls should industry practitioners and investors be aware of? Let’s explore this in depth.

1. Why is Hong Kong accelerating the issuance of stablecoin licenses?

First, it’s essential to clarify Hong Kong’s regulatory positioning and scope for stablecoins. The Stablecoin Ordinance is a formal local regulation, and the issuance of the first batch of licenses is a key step in implementing this ordinance. Its core purpose is to define a compliant framework and unify regulatory standards for stablecoin issuance and operation within Hong Kong. The HKMA will conduct approval and supervision based on this.

Note that, currently, this license applies only to institutions registered and operating in Hong Kong; it does not directly apply to mainland China. However, Hong Kong’s regulatory practices serve as an important reference for exploring stablecoin compliance pathways nationwide.

Moreover, license issuance is a practical necessity to break free from compliance dilemmas in the industry. Previously, the stablecoin sector was plagued by unlicensed issuance, reserve mismanagement, and money laundering risks, with both regulators and markets lacking clear rules. Hong Kong’s strict approval process filters compliant entities, clarifies core requirements such as issuance, reserves, and anti-money laundering, and resolves the ambiguity of “who can do it and how,” providing clear compliance guidance for the industry.

2. Hong Kong officials: the first batch of licenses will be officially issued by the end of March!

(a) Compliance of underlying assets

According to Hong Kong Radio on February 11, Hong Kong SAR Chief Executive John Lee stated that the HKMA is actively processing license applications for stablecoin issuers, believing that the first batch of licenses will be issued next month.

On February 25, Hong Kong’s Financial Secretary Paul Chan explicitly stated in the 2026 Budget that Hong Kong will issue the first fiat-backed stablecoin licenses in March. The consistent messaging from the Chief Executive and the Financial Secretary underscores Hong Kong’s emphasis on the license issuance, making the timing no longer speculation but an official, confirmed plan.

HKMA Chief Executive Eddie Yue previously emphasized that only a “very limited number” of licenses will be issued initially, adhering to the principle of “prudence first, quality over quantity.” This clearly outlines the core tone of the approval process—quality takes precedence over quantity, and regulators will not lower standards to increase market participation but will prioritize risk control. The Sister Sa team predicts that the initial batch will be in single digits, likely institutions with mature risk management systems, good market reputation, and effective anti-money laundering compliance.

Many industry insiders speculate that Standard Chartered and HSBC will be among the licensees. While not officially confirmed, these guesses are plausible since both banks are issuers of Hong Kong dollar notes and have established mature operations in reserve management, liquidity maintenance, and currency credit—highly aligned with the reserve management requirements for stablecoins.

From an approval logic perspective, Hong Kong’s stablecoin license review essentially transfers traditional financial prudential standards to the digital financial sector. It requires institutions to meet hard indicators such as capital reserves, reserve assets, and redemption mechanisms, as well as soft skills like risk management, AML systems, and corporate governance. The licensed entities selected will become benchmarks for compliance in Hong Kong’s stablecoin market.

3. What impacts will the first batch of licenses bring after issuance?

The confirmation of licensees will end the chaotic, unlicensed stablecoin market—compliance will become the only survival principle. Bank-affiliated institutions, with their mature capital, risk control, and regulatory trust, will dominate the market landscape. Unlicensed entities will be forced to exit or shift to supporting services, with unlicensed operations facing significantly higher risks.

Legally compliant issuance of stablecoins will effectively address the regulatory vacuum and risks in the global stablecoin market, injecting strong confidence. Licensees must strictly follow the requirements of the Stablecoin Ordinance, including a minimum paid-up capital of HKD 25 million, 100% high-quality liquid reserves, customer due diligence, and T+0 redemption. Reserve assets will be held in independent custody and subject to real-time audits, eliminating issues like reserve misrepresentation and fund misappropriation common in offshore stablecoins. This regulation greatly enhances safety for investors and institutions, attracting global digital finance resources to Hong Kong and laying the foundation for scalable stablecoin applications.

Strict regulatory standards will effectively eliminate industry misconduct such as reserve fraud, providing market reassurance. The HKMA’s rigorous standards for reserve assets and disclosure will significantly boost investor and industry confidence, drawing more global digital financial resources into Hong Kong. In the future, compliant stablecoins will gradually break down barriers between traditional finance and digital assets, becoming mainstream tools for cross-border payments and institutional settlements, opening new development avenues.

Furthermore, license issuance will promote deeper integration of stablecoins with traditional finance and the Web3 ecosystem, especially in cross-border payment scenarios. The compliant issuance of stablecoins not only enhances Hong Kong’s position as a global digital finance hub but also provides a model for global regulation. Hong Kong becomes the first international financial center to fully implement a legal stablecoin regulatory framework, forming a regulatory tripartite with the US and Europe, consolidating its role as Asia’s digital asset center.

Under the “one country, two systems” framework, Hong Kong’s “prudent and inclusive” regulatory approach offers a model for domestic digital financial regulation, clarifying compliance boundaries for practitioners. It also makes Hong Kong a key window for domestic industry players to transition compliantly and connect with global markets, promoting the healthy, efficient, and trustworthy development of digital finance.

4. How should different entities respond compliantly?

Having understood the impacts of license issuance, let’s discuss practical strategies—how should different stakeholders respond? Whether you are investors, Web3 companies, or traditional financial institutions, it’s crucial to identify your position and operate within the compliance framework to seize opportunities and avoid pitfalls.

(a) Ordinary investors: Use compliant products rationally, beware of cross-border risks

For ordinary investors, the core principle is “stay away from unlicensed, choose licensed.” After the HKMA announced the list of first licensed institutions, priority should be given to stablecoins issued by bank-affiliated entities. These products are backed by bank credit, with transparent reserves and guaranteed redemption mechanisms, ensuring asset safety under regulatory oversight. Remember the principle of “risk borne by oneself”—avoid blindly speculating on stablecoins. Their primary value lies in payments and settlements, not speculation, so investors should view their investment value rationally.

Additionally, investors must be vigilant about cross-border violations. According to the joint notice issued by the People’s Bank of China and other agencies on further preventing and addressing risks related to virtual currencies, stablecoins do not have legal tender status and cannot be used as a medium of exchange. Domestic transactions and intermediary services related to stablecoins remain illegal financial activities. Using domestic RMB to buy Hong Kong stablecoins and then exchanging for foreign currency abroad could be deemed as deliberately circumventing foreign exchange controls, violating the “vicarious foreign exchange trading” clause in the judicial interpretation of illegal foreign exchange transactions, and could lead to criminal charges. Remember: “compliance” is territorial—Hong Kong licenses do not exempt from mainland China’s foreign exchange restrictions. Cross-border “wash trading” will face strict legal penalties.

(b) Web3 companies: Abandon independent licensing, shift to cooperation

For Web3 companies, if they cannot obtain a license initially, they should adopt strategic responses—either participate in stablecoin sandbox testing to gain compliance experience or cooperate with licensed institutions by providing technology support and scene development. Relying on licensed entities’ compliance credentials allows lawful operation.

For example, cross-border payment-focused Web3 firms can partner with licensed banks to support stablecoin deployment in cross-border payments; digital asset custody firms can collaborate with licensed institutions to offer compliant custody services. This approach avoids unlicensed risks and shares in the industry’s growth opportunities, making it the best choice for small and medium-sized Web3 enterprises.

© Traditional financial institutions: Seize early opportunities, plan for scenario deployment

Traditional financial institutions, especially banks, are the biggest winners in this licensing round. They should leverage their capital, risk control, and customer base to accelerate stablecoin license applications. Once licensed, they should quickly develop stablecoin use cases such as cross-border payments, institutional settlements, and asset tokenization, leveraging stablecoins’ role as a financial infrastructure.

Non-bank financial institutions like brokerages and asset managers can form joint ventures with banks to jointly apply for licenses or cooperate with licensed banks to expand stablecoin-related services. For example, asset managers can develop digital asset wealth management products based on licensed bank stablecoins; brokerages can provide compliant trading channels for stablecoins, achieving mutual benefits. All traditional financial entities must also strictly avoid offering stablecoin exchange or trading services to mainland residents to stay within regulatory boundaries.

Conclusion

The issuance of Hong Kong’s first stablecoin licenses is not the end but the beginning of compliant development. It marks the industry’s transition from “license-free chaos” to “compliance-led” growth, offering industry practitioners hope for lawful progress.

It’s worth noting that many users are accustomed to offshore stablecoins like USDT, and migrating to compliant stablecoins involves costs and challenges. This is a key obstacle in early promotion. However, as the stablecoin ecosystem matures, expands its use cases, and user education deepens, these migration issues are expected to diminish. The market acceptance of compliant stablecoins will steadily increase, truly achieving a win-win situation for digital financial innovation and financial security.