Hong Kong set to issue first stablecoin licences ‘early next year’
2025-07-29
‘We aim to progress step by step, gradually driving the digital transformation of Hong Kong,’ HKMA deputy chief executive Darryl Chan says
The Hong Kong Monetary Authority (HKMA) is likely to issue the first batch of stablecoin licences early next year, as the city’s de-facto central bank urged potential issuers to submit their applications by the end of September.
Ahead of the stablecoin ordinance taking effect on August 1, the HKMA unveiled on Tuesday licensing procedures and explanatory notes, as well as two sets of guidelines for supervising licensed stablecoin issuers, and anti-money-laundering and counterterrorism financing requirements for regulated stablecoin activities.
Darryl Chan Wai-man, deputy chief executive of HKMA, said the regulator’s emphasis was on the importance of financial management when it issues licences to stablecoin issuers.
When asked about the issuance of stablecoin licences, Chan said a realistic timeline was “early next year”.
“Considering Hong Kong’s well-established systems, we do not expect to achieve large-scale [stablecoin adoption] immediately in the early stages,” he said. “Instead, we aim to progress step by step, gradually driving the digital transformation of Hong Kong.”
Applicants must demonstrate a well-developed, feasible business plan to ensure the sustainability and stability of their proposed stablecoin, according to Chan. “Risk management, including asset management and IT infrastructure, is also an important factor when considering licence issuance,” he said.
The HKMA said in August it would give its expectations and feedback to parties interested in applying for a licence to issue stablecoins – cryptocurrencies backed by a reference asset, typically a fiat currency like the US dollar.
The licensing criteria included regulatory compliance, concrete use cases and business plans, and sustainability – whether a potential issuer had sufficient technical and financial resources, according to the HKMA.
The regulator has created a webpage that will show licensed stablecoin issuers on its website. Under the stablecoin ordinance, falsely claiming to be a licensee or applicant is an offence.
The HKMA said in due course it would announce the first batch of stablecoin licences and these would likely be “a handful”.
“The application process is going to be a rolling process,” Chan said. “So those who are not granted a licence in the initial stage, if they still wish to pursue a licence, we will be prepared to continue communicating with them.”
The public should also stay vigilant to any unregulated issuers in Hong Kong and they would be holding unlicensed stablecoins at their own risk, it added.
In the latest supervisory guidelines, stablecoin issuers are required to follow a set of rules covering reserve assets management, issuance, redemption and distribution, risk management and corporate governance.
For addressing the risks of stablecoins being used as a money-laundering tool, a licensed stablecoin issuer would be required to implement controls related to customer due diligence, risk management of customers’ wallets, travel rules for transfers and monitoring.
The HKMA also planned to conduct assessments and investigations if the ordinance and requirements were violated and could impose sanctions on regulated persons.
