Original title: "Hong Kong's stable currency policy is implemented, and this is enough for you to know"

Starting from August 1, 2025, the Hong Kong Monetary Authority will open applications for stablecoin issuance licenses, marking the entry of stablecoin development in Hong Kong into a new stage of formal implementation.

This policy has been a long time in the making. Over the past year, the Hong Kong Monetary Authority (HKMA) has been conducting sandbox testing of stablecoin applications and gradually clarifying regulatory guidelines and application pathways. Participating institutions will now move from testing to issuing and circulating stablecoins under a formal regulatory framework.

According to incomplete statistics, dozens of institutions have indicated they will apply for stablecoin licenses. Meanwhile, more local banks, technology companies, and Web 3 teams are making further preparations 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.

Progress of stablecoin regulation in Hong Kong

1. The regulatory system officially takes effect

The Stablecoin Regulations will officially come into effect on August 1, 2025 .

The HKMA will simultaneously publish four relevant documents in the Gazette (English version only):

Consultation Summary and Official Guidelines for the Supervision of Licensed Stablecoin Issuers

Consultation Summary and Formal Guidelines on Combating Money Laundering and Terrorist Financing (Applicable to Licensed Stablecoin Issuers)

Summary of the Licensing Regime for Stablecoin Issuers

Summary of Transitional Provisions for Issuers of Existing Stablecoins

II. Licensing Process and Requirements

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

Interested applicants are encouraged to contact the HKMA via its official email address before August 31 to communicate regulatory expectations and feedback.

The Monetary Authority of Singapore reminds market participants that they should be cautious in public communications and should not falsely claim that they have obtained a license or are in the process of applying for one, as this would be illegal.

III. Application Conditions and Compliance Requirements

The identities of all Hong Kong compliant stablecoin holders must be verified, which is equivalent to a real-name system .

The HKMA's Assistant Director-General (Regulation and Anti-Money Laundering), Mr. Chan King-hong , said that this regulation is stricter than the previous "white list" system; if the technology matures in the future, there is a chance that it will be relaxed.

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

4. The HKMA’s stance on fiat-pegged currencies

HKMA Deputy Chief Executive Chen Weimin said:

Can apply for a stablecoin license pegged to a single fiat currency,

You can also apply for a stablecoin license pegged to a basket of fiat currencies.

However, the currency type must be clearly stated when applying.

Chen Weimin also emphasized that the threshold for licensing is very high and the first license is expected to be issued at the beginning of next year .

V. Transitional Arrangements and Classified Treatment

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

Those who meet regulatory requirements can obtain a temporary license;

· Those who fail to meet the target within 3 months : must terminate the business within 4 months;

· Those who do not meet the standards : must terminate operations within 1 month after receiving the notice.

Requirements include: full reserves, processing redemptions within 1 day, establishing an entity in Hong Kong, maintaining financial resources, KYC, transaction monitoring, etc.

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

Hong Kong policymakers’ latest stance on stablecoins

With the Stablecoin Ordinance slated to officially come into effect on August 1, 2025, the Hong Kong government and relevant institutions have been intensively releasing policy signals regarding stablecoins on various occasions. These statements cover not only regulatory logic and licensing mechanisms, but also key topics such as pegged currencies, implementation scenarios, and risk management, gradually outlining the practical operational outlines of Hong Kong's stablecoin regulatory system.

1. Stablecoins are not speculative tools, but financial infrastructure

In all public statements, one position that has been repeatedly emphasized is that stablecoins should not become a tool for market speculation .

On July 20th, Hong Kong Financial Services Development Council Chairman Hung Pi-cheng stated at the annual report release that stablecoins should play a stabilizing role, and that the digitization of asset markets is a long-term battle that cannot be short-sighted. He also stated that while various assets will be tokenized in the future, this process will not be completed within 24 hours, and that we should not expect the entire financial system to be fully blockchain-enabled in the short term.

Secretary for Financial Services and the Treasury Christopher Hui has publicly reiterated similar views several times over the past few months. He believes that stablecoins should be viewed as financial development tools that improve financial efficiency, rather than as a means of generating wealth. On June 29th, he stated that the government will adhere to a clear regulatory philosophy and require issuers to have capital, reserve mechanisms, and redemption capabilities to prevent systemic risks and safeguard monetary sovereignty.

Financial Secretary Paul Chan Mo-po has also pointed out in several signed articles that stablecoins, with their programmable nature, can be used for payment automation and the restructuring of financial services processes, but their development should not be divorced from the needs of the real economy. He emphasized: "This is not a simple pursuit of technology, nor is it a revelry in tools."

Voices from central think tanks have also highlighted the macroeconomic context for stablecoins. On June 21st, Li Yang, chairman of the National Financial and Development Laboratory, stated that stablecoins are essentially an on-chain extension of the US dollar and a tool used by the United States to digitize its hegemony. China should capitalize on this momentum to promote the internationalization of the RMB and consider developing complementary mechanisms between RMB stablecoins and central bank digital currencies.

2. The licensing system has been tightened, and the application threshold is high.

Hong Kong's stablecoin regulatory regime will employ a high-standard review mechanism. On July 30th, HKMA Deputy Chief Executive Chan Wai-min clarified at a technical briefing that the licensing threshold is "very high." In the initial phase, licenses will not be issued in large numbers at once, but will be assessed on a case-by-case basis based on the quality of the application materials. The first license is expected to be issued early next year.

In a previous article, HKMA Chief Executive Eddie Yue noted that stablecoin issuers face compliance requirements comparable to those faced by financial institutions like e-wallets and banks, with consistent oversight applied to asset reserve management, redemption policies, and anti-money laundering mechanisms. Initially, only a "small number of licenses" will be issued, with a focus on assessing issuers' business plans, practical scenarios, reserve capacity, and technical security.

Xu Zhengyu has repeatedly pointed out that issuers must "complete redemption within one day" after the user initiates it, and at the same time establish a stabilization mechanism and a customer asset isolation mechanism to fully implement anti-money laundering and anti-terrorist financing regulations.

3. Cross-border settlement is the most popular application scenario, followed by Web 3

Compared with the narrative emphasizing "on-chain" or "DeFi", the policy-makers' positioning of stablecoins has always been centered on cross-border payments and clearing systems .

Yu Weiwen stated that the first stablecoins will focus primarily on cross-border trade settlement and Web 3 scenario testing. He also emphasized that sandbox participation is not a prerequisite for licensing, and even if an institution enters the testing scope, it does not necessarily guarantee a full license in the future.

Xu Zhengyu mentioned in the interview that stablecoins can be used as an alternative payment method to local currency fluctuations in the "Belt and Road" region, and are particularly suitable for scenarios with underdeveloped foreign exchange markets such as infrastructure projects and engineering contracting.

Chan Mo-po said that Hong Kong will continue to promote the tokenization of financial assets, gradually introduce token settlement mechanisms in markets such as green bonds, ETFs, and metal commodities, and establish a bridge between trading currencies and on-chain assets through stablecoins.

4. The fiat currency anchoring mechanism is open, and the RMB stablecoin needs careful consideration.

Regarding the arrangement of the pegged currency, the policy makers have made it clear that the Hong Kong regulatory framework is open in design.

On July 30, Chen Weimin said that applicants can choose to anchor to a certain fiat currency, or anchor to a basket of fiat currencies, and they only need to declare it clearly when applying.

Xu Zhengyu has previously discussed the possibility of a "RMB stablecoin" on numerous occasions. He noted that pegging to the RMB isn't legally prohibited, but if it involves exchange rate management and macroeconomic policy, communication and coordination with relevant mainland authorities would be necessary. "Hong Kong has the legal space, but if it were to be implemented, it would have to take into account the exchange rate and monetary policy of the entire country."

Paul Chan also pointed out in his essay that allowing the use of different fiat currencies as anchor assets would help attract more international institutions to choose to issue stablecoins in Hong Kong based on their actual application scenarios.

V. Cautionary Reminder to Investors and the Public

While promoting institutional development, many policymakers also issued sober reminders about the market's enthusiasm.

Legislative Council member Ng Kit-chung stated that Hong Kong has ample room for the development of stablecoins, and will become a testing ground for the integration of finance and the real economy. However, he cautioned that retail investors should remain vigilant when investing in emerging asset classes, avoid blindly following trends, and fully understand the product risks.

The HKMA has also issued an announcement, reminding the public to be wary of unauthorized stablecoin projects or individuals claiming to be "licensed" or "applying for a license", and emphasizing that if the public holds unlicensed stablecoins, they must bear the relevant risks themselves.

How does the market view Hong Kong’s stablecoin regulation?

With the imminent implementation of Hong Kong's Stablecoin Ordinance, intensive market discussion has swirled around topics such as the pace of licensing, the path forward for specific scenarios, and the potential for RMB anchoring. Voices from securities firms, fund companies, foreign investment banks, and the media are gradually revealing the market's structural expectations and potential impact of this regulatory regime.

1. Licensing Pace and Expectations for the First Batch of Licensed Institutions

On July 30th, CITIC Securities released a research report stating that the "Summary Explanation of the Stablecoin Issuer Licensing Regime" will be the most valuable official document for the current application phase. The report predicts that the first batch of stablecoin licenses will be "only in the single digits," with issuance expected before the end of the year at the earliest. The HKMA encourages institutions to contact the regulator by August 31st, with the official application deadline set for September 30th.

The report recommends focusing on two main lines: one is issuers with a clear possibility of obtaining license approval; the other is platform companies that have been determined to participate in the construction of stablecoin usage scenarios.

Gan Tian, CEO of China Asset Management (Hong Kong), sees the current stage as a critical juncture where "basic rules have been established and pilot scenarios are ready to begin." He revealed that China Asset Management has participated in the Hong Kong stablecoin sandbox testing and is exploring integrated approaches for payment, subscription, redemption, and asset management. He believes that whoever can first achieve a closed loop of "compliance + implementation + asset connectivity" will likely become a leading force in the stablecoin market.

II. Regulatory Path and the "Dual Track" Concept for the Hong Kong Dollar and the Renminbi

On July 23rd, Ping An Securities released a report stating that Hong Kong may develop a dual-track regulatory framework: a "US dollar stablecoin connecting to international markets" and a Hong Kong dollar stablecoin connecting to mainland China. This will, on the one hand, continue to attract dollar-focused projects to Hong Kong; on the other hand, it will also reserve institutional space for the internationalization of the RMB.

The report notes that Hong Kong's definition of stablecoins is not limited to a specific type of fiat currency, and non-US dollar stablecoins may see a growing market share in the future. Currently, Hong Kong's stablecoin regulations include overseas projects that are "partially pegged to the Hong Kong dollar."

Xiao Feng (Chairman of HashKey Group) stated in an interview that Hong Kong stablecoin licenses will not be limited to Hong Kong dollar pegs. The pegged currency and the public blockchain network deployed will be determined by the issuer. He mentioned that networks such as Ethereum and Solana could serve as infrastructure for stablecoin deployment in Hong Kong.

3. Policy Expectations and Financial Functions of CNH Stablecoin

Since June, whether the "Offshore RMB Stablecoin (CNH Stablecoin)" will be piloted first in Hong Kong has become a hot topic in the market.

Morgan Stanley noted that Hong Kong's stablecoin regulations "pave the first legal path" for the CNH stablecoin. Backed by an offshore liquidity pool of approximately 1 trillion RMB, the CNH stablecoin can verify the feasibility of cross-border settlement without violating mainland capital controls and serve as a supplementary payment channel beyond CIPS and SWIFT.

Morgan Stanley's chief economist for China, Xing Ziqiang, said that Hong Kong should first promote stablecoins pegged to the US dollar and Hong Kong dollar, establish a foundation of technical and market trust, and then gradually introduce the CNH stablecoin to strengthen the RMB's position in the digital payment system.

The Hong Kong Economic Journal wrote that Hong Kong could serve as a "pioneer in experimentation" to promote the implementation of the CNH stablecoin to address competition for international payment discourse power. However, this requires proper compliance with regulatory requirements such as anti-money laundering and counter-terrorist financing.

The Economic Observer commented that if the CNH stablecoin is piloted in Hong Kong, it would establish a RMB channel independent of the SWIFT system and open up a new digital path for RMB internationalization. This exploration could become another institutional leap following the RMB cross-border settlement mechanism established in 2009.

Wang Yongli, former Vice President of the Bank of China, also stated in a statement that China should actively respond to the US legislation supporting the strategic development of dollar-denominated stablecoins. Hong Kong, with its leading stablecoin regulatory system, is well-positioned to pilot the CNH stablecoin, which could be used primarily for overseas crypto asset trading and clearing.

4. Financial Market Impact and Capital Focus

In a June 3rd report, GF Securities noted that while the Hong Kong stablecoin draft is still in its early stages, it will create short-term structural investment opportunities, primarily in sectors such as digital currencies, cross-border payments, blockchain, and RWA. The report suggests that if policies clearly support RMB-pegged stablecoins, some A-share listed companies will benefit from the regulatory compliance benefits of the "Hong Kong Bridge."

However, GF Securities also pointed out that since the current domestic virtual asset supervision is still relatively strict, the probability of large-scale incremental funds entering the market is still relatively low.

Ping An Securities further added that as global stablecoin regulation gradually takes shape, it is expected to promote the establishment of a unified international regulatory framework in the future. China needs to seize the institutional window period and explore a controllable path through Hong Kong to avoid being completely monopolized by the US dollar stablecoin in the digital asset field.

Media outlets such as CCTV's "Yuyuan Tantian" and the Securities Times have also published commentaries, arguing that the US's promotion of the digitalization of the dollar through stablecoins is a new form of financial expansion. If China remains largely absent from its stablecoin strategy, it may be forced to passively respond to the new dollar-dominated settlement network.

Who is preparing to apply for a Hong Kong stablecoin license?

With the Stablecoin Ordinance set to take effect on August 1, 2025, a number of companies are accelerating their entry into the market, preparing or announcing applications for stablecoin issuer licenses. These participants come from diverse backgrounds, including financial institutions, technology platforms, payment companies, and blockchain startups, reflecting the diverse response to the implementation of Hong Kong's stablecoin regulatory regime.

1. Overall market enthusiasm

According to a report on July 14, 50 to 60 companies are interested in 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 backgrounds;

It is expected that only 3-4 licenses will be issued in the first phase, and the initial stablecoins will mainly be pegged to the Hong Kong dollar and the US dollar.

II. List of Sandbox Pilot Institutions (to be announced on July 18, 2024)

The following five institutions participated in the stablecoin issuer sandbox test:

1. JD CoinChain Technology (Hong Kong) Co., Ltd.

2. Yuanbi Innovation Technology Co., Ltd.

3. Standard Chartered Bank (Hong Kong) Limited

4. Anni Group Co., Ltd.

5. Hong Kong Telecom (HKT) Limited

3. Enterprises that have clearly stated that they will apply for or are in the process of applying for a license

China 33 Media

An announcement on July 15 stated that it plans to apply for a Hong Kong stablecoin license, and the funds will come from share placement and cash reserves.

Tiansheng Capital

On July 11, it announced plans to establish a digital asset trading and foreign exchange settlement company and apply for a stablecoin license. It plans to use stablecoins for art transactions and foreign exchange settlement services, focusing on cross-border trade settlement.

More digital intelligence

On July 3, it was announced that it was preparing to apply for a Hong Kong stablecoin license.

Animoca Brands + Standard Chartered Bank (Hong Kong) + Hong Kong Telecom

They have publicly stated on multiple occasions 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 virtual asset trading in games, cross-border trade, and financial settlement.

JD.com

A company has publicly announced plans to issue a stablecoin in Hong Kong, pegged 1:1 to the Hong Kong dollar. The issuer, JD CoinChain Technology (Hong Kong), has also been selected as a participant in the HKMA's stablecoin sandbox program.

Ant International

According to people familiar with the matter reported in June, the company will apply for an issuer license as soon as the Hong Kong Stablecoin Ordinance comes into effect, and also plans to seek licenses in Singapore and Luxembourg.

Connect the numbers

According to sources familiar with the matter, LianLian Digital is actively exploring applications for stablecoin licenses in Hong Kong and Singapore. Its subsidiary, DFX Labs, already holds a virtual asset trading platform license issued by the Hong Kong Securities and Futures Commission.

4. Enterprises that are researching, focusing on, or planning related businesses

Ping An of China

On July 21, it responded on the interactive platform that it has noticed the changes in Hong Kong's stablecoin regulation and is keeping a close eye on and actively researching it.

· Three untrustworthy

On June 30, it stated that the company has participated in virtual currency and stablecoin related businesses in Hong Kong. As a cryptographic infrastructure provider, it will provide security for related projects.

V. Clarifications

Octopus Company

The company was previously rumored to be participating in a stablecoin accelerator program. The company later clarified that it was only participating in an exploratory program led by Brinc in an "advisory capacity," focusing on conceptual research rather than stablecoin product development or formal collaboration.

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