July 31, 2025

By Our Correspondent

Since Hong Kong’s de facto central bank encouraged prospective issuers to submit their applications by the end of September, the Hong Kong Monetary Authority (HKMA) is anticipated to grant the first batch of stablecoin licenses early in the following year.

The HKMA on Tuesday released licensing procedures and explanatory notes, two sets of guidelines for overseeing licensed stablecoin issuers, and anti-money-laundering and counterterrorism financing requirements for regulated stablecoin activities, ahead of the stablecoin ordinance going into effect on August 1.

According to HKMA deputy chief executive Darryl Chan Wai-man, the regulator places a strong focus on the value of sound financial management when granting licenses to stablecoin issuers.

In response to a question concerning stablecoin license issuing, Chan stated that “early next year” was a reasonable schedule.

With a regulatory plan, Hong Kong enters a new era as a hub for digital assets, according to FSTB chief Chris Hui. “We do not expect to achieve large-scale [stablecoin adoption] immediately in the early stages, given Hong Kong’s well-established systems,” he stated. “Instead, our goal is to advance incrementally, progressively propelling Hong Kong’s digital transformation.”

According to Chan, in order to guarantee the stability and sustainability of their suggested stablecoin, applicants must present a thorough, workable business strategy. “When thinking about issuing licenses, risk management—which includes asset management and IT infrastructure—is also a significant factor,” he stated.

Stablecoins are cryptocurrencies backed by a reference asset, usually a fiat currency like the US dollar. In August, the HKMA said that it will provide its expectations and feedback to businesses interested in applying for a license to issue stablecoins.

According to the HKMA, the licensing criteria included sustainability—whether a potential issuer had enough financial and technical resources—as well as regulatory compliance, tangible use cases, and business plans.

In order to display authorized stablecoin issuers on its website, the regulator has developed a webpage. It is illegal to pretend to be a licensee or applicant under the stablecoin ordinance.

The HKMA stated that it would eventually reveal the initial group of stablecoin licenses, which would probably be “a handful.”

Chan stated that the application procedure would be a rolling one. “We will be ready to keep in touch with those who are not awarded a license in the first stage if they still want to pursue one.”

The HKMA cautioned market players to “exercise due caution in their public communications and refrain from making statements that could be misinterpreted or create unrealistic expectations,” in addition to the numerous warnings it has issued in the previous month.

Additionally, it stated that the public should be on the lookout for any illegal issuers in Hong Kong, as they would be holding unregistered stablecoins at their own risk.

According to the most recent supervisory recommendations, stablecoin issuers must go by a set of regulations pertaining to corporate governance, risk management, issuance, redemption, and distribution, as well as reserve asset management.