Hong Kong to Issue Limited Stablecoin Licenses Starting August 2025

Hong Kong is set to implement a new law governing stablecoins, with the Hong Kong Stablecoin Ordinance coming into effect on August 1, 2025. This legislation marks a significant milestone for the region's burgeoning crypto and finance sectors, aiming to enhance oversight and regulation in the stablecoin market.

Upon the law's enactment, the Hong Kong Monetary Authority (HKMA) will commence accepting applications for stablecoin licenses. However, initial indications suggest that only a limited number of licenses will be issued, with some insiders speculating that the number could be in the single digits. This has sparked intense competition among applicants, with over 40 companies already preparing to submit their applications. Notable applicants include major players such as JD.com, Standard Chartered, and Yuanbi, reflecting the high level of interest from large corporations in the stablecoin space.

The stringent regulations and limited availability of licenses have led many companies to seek legal expertise to ensure their applications comply with the new laws. Smaller firms face significant challenges in securing a license due to the competitive landscape and the small number of permits available. Stablecoins, which serve as a bridge between traditional finance and digital assets, are increasingly popular for trading, lending, and cross-border transactions. This new law is expected to further stimulate the stablecoin market in Hong Kong.

Despite the enthusiasm, some experts caution against overestimating the impact of stablecoins. Qiao Yide, a vice president of the Shanghai Development Research Foundation, notes that stablecoins may not significantly reduce the cost of cross-border payments, with actual costs remaining close to 1%. Nevertheless, the demand for stablecoin licenses remains high, with major players like Ant International and Ant Digits also expressing interest in the market.

Alex Zuo, a senior vice president at Cobo, highlights the intense competition for licenses, with over 40 businesses vying for a limited number of permits. He predicts that licenses will likely be granted to established major players, given the competitive nature of the market. Tech giants in China are actively recruiting blockchain professionals to enhance their chances of securing a license when applications open in August.

The appeal of stablecoins lies in their potential to facilitate quick and affordable international transfers, as well as the opportunity for large internet corporations to mint and distribute their own stablecoins. However, not all companies are genuinely committed to the stablecoin market. Some smaller firms are leveraging the stablecoin theme to attract attention and boost their share prices, without having concrete projects in place. Industry insiders warn that these companies are more interested in generating hype than in genuine stablecoin development.

Stablecoins have become an integral part of the crypto economy, with a market capitalization of $250 billion. Governments worldwide are taking action to establish clear regulations for stablecoins, and Hong Kong is positioning itself as a leader in safe and regulated crypto finance. As the August 1 launch date approaches, all eyes are on who will be the first to receive the coveted stablecoin licenses, with the region eager to demonstrate its commitment to innovation and regulatory compliance in the crypto space.