Hong Kong Stablecoin "Starting Gun Fired": From Licensing to Ecosystem, the Real Marathon Has Just Begun

On April 10, 2026, the Hong Kong Monetary Authority (HKMA) officially granted the first batch of stablecoin issuer licenses to Anchor Financial Technology Co., Ltd. and The Hongkong and Shanghai Banking Corporation Limited. This move makes Hong Kong one of the first financial centers globally to complete the full institutional cycle of "legislation-review-licensing," marking the formal transition of stablecoin regulation from policy design to the licensed operation phase.

Amidst the overwhelming news coverage, many also noticed a thought-provoking signal: of the first two licensees, one is HSBC holding a license independently, while the other, Anchor Financial, is a joint venture entity backed by Standard Chartered Bank (Hong Kong) Limited, Hong Kong Telecom, and Animoca Brands.

In other words, among the first entrants are two of Hong Kong's three note-issuing banks: HSBC and Standard Chartered.

What does this signify?

I. From "Note-Issuing Bank" to "Stablecoin Issuer"

To be realistic, the fact that the first licenses went to HSBC and Standard Chartered is not surprising in itself. However, the policy signals released by this choice are worth careful interpretation.

This requires first revisiting Hong Kong's unique currency issuance system. As is well known, Hong Kong's current banknote system is primarily issued by commercial banks. Except for the HK$10 note issued directly by the Hong Kong government (via the HKMA), the HK$20, HK$50, HK$100, HK$500, and HK$1000 notes are issued by three note-issuing banks: HSBC, Standard Chartered, and Bank of China (Hong Kong).

In other words, regarding currency and financial infrastructure, Hong Kong has long accepted a very clear institutional arrangement: highly regulated commercial institutions undertake the front-end issuance function, while regulatory authorities control the system's stability through rules, reserve requirements, and prudential oversight.

Viewed within this framework, the decision to grant the first stablecoin licenses to HSBC and a consortium led by Standard Chartered essentially continues the logic of "starting with the most reliable entities first," which aligns with Hong Kong's own monetary tradition.

For a new asset class just entering the institutionalization phase, it is a very normal path for financial regulation to prioritize stability, controllability, and avoiding errors in the initial licensing round.

This is actually not difficult to understand.

Although stablecoins wear the cloak of "virtual assets," once they enter the institutionalization phase, regulators' primary focus is never on narratives but on the most traditional and financial questions: Are the reserve assets real? Is the redemption mechanism clear? Is risk isolation sufficient? Are fund flows controllable? Are the anti-money laundering and traceability mechanisms reliable?

However, following this logic naturally leads to another question: Among the three note-issuing banks, why is Bank of China (Hong Kong) absent?

This is clearly not just a simple matter of qualification or capability. In fact, Bank of China (Hong Kong) was widely considered an active participant in the first batch of applications from August to September 2025. It wasn't until October 2025, when a joint statement from the central authorities further clarified policy boundaries, imposing stronger constraints on the issuance of private stablecoins, especially those pegged to the Renminbi, that some originally planned participants, including Bank of China (Hong Kong), Bank of Communications (Hong Kong), China Construction Bank (Asia), and large internet companies like Ant Group and JD.com, shelved their related plans.

Source: Fudan Institute

This also means that the final granting of the first licenses to two note-issuing banks reflects both Hong Kong's institutional logic of prioritizing stability in the initial stage and a pragmatic answer within the current cross-border policy environment. Whether Hong Kong's stablecoins can go far ultimately depends on who can truly scale this system in the next phase.

And this is precisely the point most easily overlooked in many discussions.

II. Compliance is Important, but "License" ≠ "Ecosystem"

When analyzing the prospects of Hong Kong's stablecoins, an unavoidable reference point is the development history of Hong Kong's virtual banks.

In 2019, the HKMA issued virtual bank licenses to eight institutions. Market expectations were high at the time, with many believing the new licensing system would automatically foster new competitive dynamics and new financial experiences. By 2024, the HKMA released a review report, noting that the market response to the products and services offered by the eight virtual banks was generally positive, but also clearly stating that the current number of virtual bank licenses was appropriate and no new licenses would be issued for the time being.

This serves as a very typical reference case. In retrospect, virtual banks certainly had their achievements, but the licenses did not automatically translate into market dominance, let alone sustainable business models. This reveals a practical issue: in a financial system already possessing mature profit pools, mature customer relationships, and mature clearing channels, there is often a long road between institutional opening and market viability.

Simply put, a license solves the entry problem but does not solve problems related to user habits, scenario coverage, commercial efficiency, and network effects.

The same is true for stablecoins, and the difficulty is likely even higher.

After all, unlike virtual banks, they must not only compete with the traditional financial system but also engage in a global contest with "established players" like USDT and USDC, which are already deeply embedded in exchange, on-chain protocol, and wallet ecosystems.

Ultimately, obtaining a license does not automatically grant a market. The license only solves the problem of being permitted and trusted to issue stablecoins. It does not solve several other, more challenging issues: Why would users use your stablecoin? Why would trading platforms, wallets, merchants, market makers, and corporate financial systems be willing to integrate your stablecoin? Why would funds be willing to stay, circulate, and settle within your system, ultimately forming network effects?

In other words, issuance is the qualification on the supply side, while the ecosystem is the answer on the demand side.

From a market competition perspective, the real test begins precisely at the moment of licensing, as the competitive chain for stablecoins involves at least five links:

• Issuance: solves "whether it exists"
• Distribution: solves "whether it reaches users' hands"
• Liquidity: solves "whether frictionless entry and exit is possible"
• Use Cases: solves "what can be done besides holding"
• Operations: solves "how to ensure compliance, clearing, risk control, identity verification, and user experience run stably over the long term"

And issuance is only the first of these five links.

This is also why external criticism that "Hong Kong's stablecoins cannot rely solely on licenses" should not be simplistically interpreted as pessimism. On the contrary, such criticism points to the real homework Hong Kong's stablecoin ecosystem must complete in the next phase—after licensing, without sufficiently strong distribution capabilities, liquidity organization capabilities, and scenario integration capabilities, Hong Kong's stablecoins may remain correct at the institutional level but struggle to achieve commercial success.

Today's global stablecoin market is no longer one where users can be won over by a compliance label alone. User habits, scenario entry points, trading depth, clearing and settlement efficiency, wallet integration, fiat on/off-ramp capabilities, and developer interfaces are the key variables determining whether a stablecoin truly comes to life.

Looking at the development paths in overseas markets, this shift in focus is already very evident.

After acquiring Bridge, Stripe no longer treats stablecoins merely as a peripheral payment capability but further integrates them into corporate treasury management and global payment systems. For example, the Stablecoin Financial Accounts launched in 2025 for enterprises in 101 countries, and later the Bridge-powered Open Issuance, are attempts to upgrade stablecoins from a supported alternative asset to a "payment capability embeddable into corporate financial systems."

Circle's moves are similarly representative. Over the past period, Circle has continuously pushed USDC towards a more "programmable payments" direction: on one hand, it publicly promotes autonomous payments based on x402, enabling AI Agents to use USDC to automatically pay for APIs, computing power, data, and content; on the other hand, it is also advancing the standardization of micropayments and machine-to-machine payments.

This indicates that in the eyes of the most astute payment infrastructure players, the focus of stablecoin competition has long ceased to be solely about the issuance qualification itself, but rather about who can turn it into a financial infrastructure that enterprises can call upon, settle with, and manage.

Hong Kong has had related practices earlier. Even before Hong Kong's "Stablecoin Ordinance" officially took effect last year, the licensed OSL Group launched three new products fully targeting institutions: the compliant stablecoin management platform StableX, asset tokenization service Tokenworks, and the enterprise-grade crypto payment solution OSL BizPay. In 2026, it also launched USDGO, a compliant US dollar stablecoin meeting US federal regulatory standards and distributable in Hong Kong, primarily targeting cross-border e-commerce, bulk trade, and interactive entertainment.

Against this backdrop, looking at Hong Kong reveals a more critical question: while the first licensing round solves "who enters safely first," whether Hong Kong can form a truly competitive stablecoin ecosystem depends on "who will complete the remaining four tasks."

III. Issuance is Not the Endgame; Ecosystem Co-builders are Key

From the perspective of the global stablecoin market structure, the pattern of ecosystem division of labor is becoming increasingly clear.

The most notable feature is the high concentration on the issuance side. For instance, USDT and USDC together account for over 86% of the total stablecoin market capitalization. However, the scale advantage of issuers does not inherently equate to ecosystem control. The real competitiveness of a stablecoin often depends not just on issuance volume but more on liquidity depth, channel coverage, and scenario penetration.

Take USDC, for example. Although its market cap is only about 42% of USDT's, its activity in on-chain transfer volume, institutional payment scenarios, and developer ecosystems is significantly higher. This is precisely due to the role of distribution networks and scenario integration capabilities, not merely issuance size. Similarly, the legal issuer of PYUSD is Paxos, but what truly drives its expansion is PayPal's account distribution capability.

This illustrates that stablecoin issuers and ecosystem co-builders already represent two different sets of capability combinations:

• Issuers are responsible for reserve management, compliance/risk control, and redemption mechanisms—the core tasks of the "issuance layer."
• Ecosystem co-builders are responsible for distribution channels, liquidity aggregation, scenario integration, and commercial operations—the core tasks of the "application layer."

The relationship between them is not substitutive but rather one of upstream-downstream collaboration.

If we compare the stablecoin ecosystem to a building, then an issuer obtaining a license is merely obtaining a permit to lay the foundation. What truly determines how high the building can rise are the load-bearing structures of each subsequent floor. Distribution channels, trading liquidity, payment networks, scenario integration, and compliance operation capabilities are precisely part of these load-bearing structures.

Therefore, the real test facing Hong Kong's stablecoins may never have been "who can get a license," but rather "after getting the license, who can truly put it to use."

This is also why what Hong Kong's stablecoin ecosystem truly lacks in the next phase may not necessarily be new issuers, but rather those ecosystem-type platforms capable of undertaking distribution, trading, payment, liquidity, and compliance operations.

In fact, even the first batch of licensed institutions themselves are already demonstrating this through action. According to reports, Anchor Financial plans to partner with selected enterprises to provide its stablecoin to the public as distribution partners. HSBC, on the other hand, intends to reach users through its PayMe and HSBC HK Mobile Banking apps.

In other words, even for the first licensees, the immediate reaction upon launch is not "I can finally issue a coin," but rather "how should I distribute it?" This in itself indicates that stablecoins are not a business that can be completed by issuers alone but a systematic project that must rely on multi-layered ecosystem collaboration.

It is precisely in this sense that what Hong Kong truly lacks in the next phase may not necessarily be new issuers, but rather ecosystem-type platforms capable of undertaking distribution, trading, payment, liquidity, and compliance operations.

This is also the most noteworthy position in this round of discussion—comprehensive capability platforms that can simultaneously connect the issuance side, circulation side, and usage side may truly determine the height of Hong Kong's stablecoin ecosystem.

The aforementioned Hong Kong-based licensed player, OSL, has explicitly stated its intention to actively cooperate with Hong Kong's licensed stablecoin issuers, leveraging its advantages in distribution, liquidity, and infrastructure to promote the launch of related products and application scenarios. This statement signifies a more proactive positioning of itself in the service role of laying the "capillaries" for this stablecoin network.

Objectively speaking, for a market that is just starting and inherently requires multi-party collaboration, the scarcity of such roles may not be lower than that of the issuance licenses themselves.

In fact, this may be the key variable determining whether Hong Kong's stablecoins can secure a place in global competition.

In Conclusion

Returning to a more macro perspective, the situation facing Hong Kong's stablecoins today is indeed not easy.

Looking towards the mainland, policy stances are unlikely to loosen in the short term. Looking overseas, the barriers of user habits and network effects are already high. In this landscape, if Hong Kong's stablecoin ecosystem remains only at the level of "licensing-issuance-compliance," it risks repeating the trajectory of virtual banks—the system looks impressive, the data is acceptable, but a larger ecosystem fails to materialize.

But conversely, this is precisely where Hong Kong's window of opportunity lies.

The global stablecoin market is undergoing a profound paradigm shift. Stablecoins are no longer just trading mediums within the crypto market; they are being re-conceptualized as the infrastructure for the next generation of global payments and settlements. In this new paradigm, compliance capability is no longer the sole competitive dimension; distribution networks, payment scenarios, technological infrastructure, and ecosystem operation capabilities have become equally, if not more, critical.

As an international financial center, Hong Kong possesses inherent advantages in institutional design and compliance governance. However, to truly translate these advantages into competitiveness for its stablecoin ecosystem, relying solely on the first batch of licenses is insufficient. It also requires payment companies, technology platforms, compliance middleware, Web3-native enterprises, and local licensed institutions to build up, layer by layer, the more difficult yet more tangible work of distribution, liquidity, scenarios, and operations.

The road after licensing is still long. The real competition for Hong Kong's stablecoins has only just begun.