Hong Kong Attracts 40 Firms for Stablecoin Licenses Under New Ordinance

Hong Kong has emerged as a focal point for the digital asset market, with over 40 firms submitting applications for stablecoin licenses under the region's new Stablecoin Ordinance. This ordinance, set to take effect on August 1, 2025, marks a significant regulatory shift aimed at fostering stability and innovation in the digital finance sector. The ordinance is particularly focused on fiat-backed stablecoins, which are expected to play a crucial role in enhancing cross-border payment efficiency and reducing transaction costs, especially in less developed markets.

Among the notable applicants are Standard Chartered, Ant Group, and Circle Innovation, each bringing unique strengths to the table. Standard Chartered is involved in a joint venture, Ant Group is exploring cross-border payment solutions, and Circle Innovation is focusing on technology solutions. This diverse range of applicants underscores the competitive nature of the regulatory landscape and the high stakes involved in securing a license.

The ordinance is designed to encourage stability among established players, much like the EU’s MiCA regulations, which have spurred consolidation and compliance costs. The limited number of licenses expected to be granted—fewer than 10—suggests that the regulatory environment will be highly competitive. This could lead to a concentration of market presence among large financial entities, with smaller players potentially relocating or exiting the market. The HKMA's cautious approach ensures robust oversight and investor protection, reflecting a strategic interest in enhancing cross-border payment efficiency and reducing transaction costs.

The licensing program will be overseen by the Hong Kong Monetary Authority (HKMA), which will focus on fiat-pegged stablecoins that adhere to strict anti-money laundering (AML) and risk control measures. The HKMA's approach contrasts with mainland China's ban on cryptocurrency trade and mining, reflecting a more open and transparent approach to regulated crypto enterprises. This regulatory environment is designed to facilitate foreign companies and foster innovation in digital finance.

Financial Secretary Paul Chan emphasized the government's gradual approach, starting with the establishment of a regulatory framework to attract international stablecoin issuers. This framework is part of Hong Kong's broader Digital Asset policy, introduced under the new “LEAP” framework in June 2025. The LEAP framework not only regulates stablecoin issuance but also supports pilot programs to explore the use of stablecoins in payments and financial services. HKMA chief Eddie Yue cautioned the public to approach stablecoins objectively, clarifying that they are payment instruments, not investment products.

Offshore yuan-pegged stablecoins have garnered significant interest, with Chinese firms like JD.com and Ant Group seeking approval. These stablecoins could contribute to the internationalization of the renminbi. The HKMA has indicated that foreign currency-based stablecoins will require coordination with relevant foreign regulators to manage exchange rate risks and broader financial impacts. An example of strategic partnerships in this space is the alliance between Goldstream Investment and AnchorX, a stablecoin issuer licensed in Hong Kong, to issue an offshore renminbi-pegged stablecoin in Kazakhstan. This partnership aims to reduce costs and enhance the circulation of offshore yuan beyond traditional payment systems.