Hong Kong to Issue Only 3–4 Stablecoin Licenses in Initial Regulatory Rollout

Hong Kong has announced that it will issue only three to four stablecoin licenses in its initial regulatory rollout, signaling a stringent approach to managing digital assets and aligning with broader financial stability goals. The Hong Kong Monetary Authority (HKMA) is enforcing a regulatory regime that requires stablecoin issuers to meet minimum capital requirements and adhere to robust compliance standards [1]. The regulatory framework, which became effective on August 1, 2025 under the Stablecoins Ordinance (Cap. 656), mandates that stablecoin reserves be fully backed by high-quality, liquid assets and that issuers comply with strict anti-money laundering (AML) and counter-terrorist financing (CFT) protocols [2]. These measures aim to ensure transparency, mitigate systemic risks, and maintain the integrity of Hong Kong’s financial system.

The licensing process remains ongoing, with the HKMA having yet to issue any approvals. Eddie Yue, Chief Executive of the HKMA, emphasized the importance of developing a structured legal framework for fiat-backed digital assets. “We are focusing on developing a structured legal framework for fiat-backed digital assets,” Yue stated, highlighting the regulator’s commitment to risk control and compliance [3]. The limited number of licenses reflects the HKMA’s cautious stance, as it seeks to balance innovation with stability in the digital asset ecosystem [4].

The new regulatory environment imposes a minimum HK$25 million paid-up capital requirement for applicants, which may favor larger, well-capitalized firms over smaller startups. Entities such as RD Technologies, which have already engaged with the HKMA through sandbox participation and secured substantial funding, are considered strong contenders for the initial licenses [5]. Meanwhile, major financial players like Ant Group and Standard Chartered are well-positioned to meet the financial and operational criteria due to their existing infrastructure and resources [6]. Smaller firms, on the other hand, are exploring niche opportunities, including CNH-backed stablecoins, to differentiate themselves in a competitive market [7].

The limited scope of licenses may lead to increased competition among stablecoin issuers, prompting firms to innovate and refine their business models to meet regulatory expectations. The HKMA has indicated that licenses will likely be issued in early 2026, with fewer than 10 firms receiving approval [8]. This phased rollout suggests a careful and deliberate approach to integrating stablecoins into the broader financial system.

For investors, the success of firms in Hong Kong’s stablecoin market will depend on their ability to align with the HKMA’s regulatory expectations and demonstrate operational robustness. Startups that have already engaged with the regulator through sandbox programs or institutional partnerships are better positioned to navigate the licensing process and secure a foothold in the market [9]. The regulatory focus on compliance and transparency is expected to create a more resilient and trustworthy stablecoin ecosystem, although it will also raise operational costs for market participants.

Hong Kong’s approach to stablecoin regulation mirrors global trends, reflecting a growing consensus among regulators to impose strict compliance requirements on digital assets. The city’s strategic location and regulatory rigor position it as a key player in global crypto markets, particularly in bridging China’s digital economy with international financial hubs. However, the high compliance costs and limited number of licenses mean that only a select few will dominate the early stages of the market [10].

Source: [1] Hong Kong May Limit First Round of Stablecoin Licenses (https://www.binance.com/en/square/post/27773964478401)

[2] Hong Kong Delays Stablecoin Licenses Amid Rigorous Compliance Standards (https://www.ainvest.com/news/hong-kong-delays-stablecoin-licenses-rigorous-compliance-standards-2508/)

[3] Hong Kong Stablecoin Licensing Regime Takes Effect (https://cryptonews.com/news/hong-kong-stablecoin-licensing-regime-takes-effect/)

[4] The detailed regulations for stablecoin issuance in Hong Kong (https://news.futunn.com/en/post/59888759/the-detailed-regulations-for-stablecoin-issuance-in-the-hong-kong)

[5] Hong Kong's Strategic Stablecoin Licensing Framework (https://www.ainvest.com/news/hong-kong-strategic-stablecoin-licensing-framework-implications-fintech-cross-border-payments-2508/)

[6] Hong Kong's Stablecoin Bill Takes Effect Today (https://crypto.news/hong-kongs-stablecoin-bill-takes-effect-today-heres-what-we-know/)