Hong Kong awards first stablecoin licenses to HSBC, Standard Chartered

Hong Kong's central bank handed out its first stablecoin licenses on Friday, awarding them to HSBC and Anchorpoint Financial, a joint venture led by Standard Chartered and including the blockchain firm Animoca Brands. The Hong Kong Monetary Authority, the territory's central bank, made the decision under a new regulatory framework that took effect in August 2025, one designed to govern how digital currencies can be issued and traded within the city.

The HKMA had received 36 applications for stablecoin licenses and signaled from the start that only a handful would make it through the first round. Financial Secretary Paul Chan said in February that approvals would be limited to "a small number," with the regulator focusing on three things: how well issuers managed risk, the quality of their reserves, and their ability to prevent money laundering. The choice to license HSBC and Standard Chartered first was not accidental. Both are among only three commercial banks in Hong Kong authorized to print the territory's banknotes—a privilege that traces back to 1846, when private banks began issuing currency backed by silver deposits because there was no colonial central bank to do it. Today, those same banks deposit U.S. dollars with the government's Exchange Fund at a fixed rate of HK$7.80 per dollar and receive Certificates of Indebtedness in return, which they use to back the physical notes they print. Eddie Yue, the HKMA's chief executive, drew a direct line between that 19th-century system and what stablecoins do now. In a blog post from December 2023, he described pre-1935 banknotes issued by commercial banks in exchange for silver deposits as a form of "private money," and argued that stablecoins are their blockchain-based equivalent—tokens with stable value that can move between people as a medium of exchange on-chain.

The licenses come with some of the world's strictest rules for how digital money can move. Under the HKMA's anti-money-laundering guidelines, stablecoins issued in Hong Kong can only be transferred to wallets whose owners have been verified through identity checks. Any transfer above HK$8,000—roughly $1,000—triggers the travel rule, which requires information about both the sender and receiver to accompany the transaction. In practice, this means the stablecoins will likely embed compliance checks directly into their smart contracts, restricting transfers to wallets that have been added to an on-chain whitelist. That makes them fundamentally different from freely transferable tokens like USDT or USDC, which move without such restrictions.

The decision to license bank-issued stablecoins also reflects a shift in Hong Kong's digital currency strategy. The HKMA had been exploring a central bank digital currency for retail use, but an 11-group pilot program that wrapped up in October found the case for a retail CBDC was weak. The city has now pivoted toward stablecoins as the more promising path forward. At Hong Kong Fintech Week last year, CBDCs were barely mentioned. Stablecoins dominated the conversation instead. Standard Chartered's CEO, Bill Winters, framed the opportunity in terms of cross-border trade. Regulated, bank-issued stablecoins and tokenized deposits, he said, could "lay the foundation for a new era of digital trade settlement," positioning them as a new medium for commerce between countries and regions.

Whether that vision will materialize is an open question. The stablecoin market is worth roughly $310 billion globally, but it is almost entirely dominated by U.S. dollar-pegged tokens. Data from CoinGecko shows that the largest stablecoins by market capitalization are all dollar-denominated. No euro-pegged or yen-pegged stablecoin has broken into the top ranks. Hong Kong is betting that a regulated, bank-issued stablecoin denominated in Hong Kong dollars can carve out a meaningful role in regional trade settlement, issued by the same institutions and operating under the same strict rules, but on new blockchain infrastructure. The fundamental challenge is whether a non-dollar stablecoin, no matter how tightly regulated, can build the network effects it needs to compete against the entrenched dominance of dollar-based alternatives.