The HKMA prepares to approve its first batch of fiat-backed digital currency issuers as the city races to lead regulated crypto finance
A Milestone in Digital Finance History
Hong Kong is weeks away from issuing the world’s first fully regulated stablecoin issuer licenses under a comprehensive national legal framework, with the Hong Kong Monetary Authority expected to grant its first approvals in March 2026. The milestone was confirmed by Financial Secretary Paul Chan Mo-po in his 2026-27 budget address on February 25, and had been signaled earlier by HKMA Chief Executive Eddie Yue, who told lawmakers that the regulator was finalizing its review of applications. The development places Hong Kong at the frontier of regulated digital finance in a way that distinguishes it from jurisdictions that have either banned cryptocurrency outright or failed to establish clear legal frameworks for stablecoins.
What the Licensing Regime Covers
Hong Kong’s Stablecoins Ordinance came into force in August 2025 and requires any entity issuing fiat-referenced stablecoins in Hong Kong to hold a license from the HKMA. The regime covers stablecoins pegged to traditional currencies including the Hong Kong dollar and other fiat currencies. To qualify for a license, issuers must maintain reserves of at least 100 percent in high-quality liquid assets, ensuring every stablecoin in circulation is fully backed. They must guarantee redemption at par value, typically within one business day. Issuers must be locally incorporated, maintain a physical management presence in Hong Kong, hold minimum paid-up capital of HK$25 million, and implement rigorous anti-money laundering and counter-terrorism financing controls. The HKMA holds broad supervisory authority and can impose additional license conditions or revoke licenses for violations.
Who Is Applying and What Is at Stake
The HKMA received applications from more than 40 prospective issuers in the first round and is assessing 36 formally. High-profile applicants include a joint venture between Standard Chartered’s Hong Kong arm, Animoca Brands, and HKT, operating as Anchorpoint Financial. Ant Group’s digital technology unit confirmed it is pursuing a license, while Bank of China Hong Kong has been reported as an applicant. The commercial stakes are significant. Stablecoins now represent a global asset class of approximately US$300 billion. A Hong Kong stablecoin license would confer regulatory credibility that could make Hong Kong-issued tokens the preferred instrument for institutional digital finance across Asia.
The Broader Regulatory Architecture
The stablecoin licensing push is part of a broader effort by Hong Kong to build a comprehensive, layered regulatory framework for digital assets. The Securities and Futures Commission already operates a licensing regime for virtual asset trading platforms, with 11 exchanges approved. The budget announced that the government would introduce additional legislation this year to establish licensing regimes for digital asset dealers and custodians, closing remaining regulatory gaps and extending oversight across the full ecosystem. The Bank for International Settlements has examined how well-designed stablecoin regulation can harness the efficiency benefits of digital currency while managing systemic risks, concluding that clear reserve requirements and redemption guarantees are the essential foundations of any credible regime. Hong Kong’s framework embodies those principles.
Competition With Singapore and Dubai
Hong Kong’s licensing push is explicitly competitive with Singapore and Dubai, both of which have pursued digital asset regulatory frameworks designed to attract global fintech businesses. Singapore’s Monetary Authority has licensed several stablecoin issuers under its own regime. Dubai’s Virtual Assets Regulatory Authority has attracted a significant number of crypto businesses seeking a regulated base. Chan noted in his budget address that the city intends to continue facilitating licensed issuers to explore different application scenarios in a compliant and risk-controlled manner, signaling a permissive but supervised approach rather than a restrictive one.
The Democracy Dimension of Digital Finance
For Hong Kong’s democracy advocates, the city’s emergence as a global leader in regulated digital finance presents a complicated picture. The regulatory expertise is genuine and the HKMA’s standards are rigorous. The Atlantic Council’s crypto regulation tracker identifies Hong Kong as one of the most developed regulatory environments for digital assets globally, a distinction earned through years of careful institutional work. But the political context of that achievement is inseparable from a broader trajectory in which Hong Kong’s regulatory independence is increasingly shaped by mainland policy priorities. Beijing’s People’s Bank of China and seven other regulators reaffirmed this year that mainland prohibitions on cryptocurrency activities extend to stablecoins. Hong Kong’s stablecoin licenses are permitted within the city under One Country Two Systems, but the legal distinction between what is permitted in Hong Kong and what is prohibited on the mainland is itself a reminder of how much the political architecture of the city’s financial freedom still matters. The March 2026 licenses will be a genuine regulatory milestone. What they cannot do is substitute for the broader freedoms that once made Hong Kong the world’s most trusted financial center.
Senior Journalist & Editor, Apple Daily UK
Contact: athena.lai@appledaily.uk
Athena Lai is a senior journalist and editor with extensive experience in Chinese-language investigative reporting and editorial leadership. Educated at a leading journalism school in the United Kingdom, Athena received formal training in fact-checking methodology, editorial governance, and international media standards, grounding her work in globally recognized best practices.
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