Prime Highlights

• Hong Kong plans to issue its first batch of stablecoin licenses in March, marking a major step in its digital finance strategy.
• The move positions Hong Kong as a regulated hub for stablecoins, even as mainland China maintains its crypto ban.

Key Facts

• The Stablecoins Ordinance was passed in May and took effect in August, requiring licenses for stablecoin issuers operating in Hong Kong or pegged to the Hong Kong dollar.
• The Hong Kong Monetary Authority is reviewing 36 applications for stablecoin licenses ahead of the planned rollout.

Background:

Hong Kong plans to issue its first stablecoin licenses in March despite Beijing’s opposition to crypto in mainland China. The move highlights the city’s effort to position itself as a regulated digital asset hub under the “one country, two systems” framework.

Eddie Yue, Chief Executive of the Hong Kong Monetary Authority (HKMA), said the regulator is reviewing an initial group of 36 stablecoin license applications and aims to make decisions in the coming weeks. The move comes after Hong Kong passed the Stablecoins Ordinance in May. The law requires companies to get a license if they want to issue stablecoins in the city or link them to the Hong Kong dollar. It took effect in August, and applications opened soon after.

Stablecoins are digital currencies that are tied to assets like traditional money or gold to keep their value stable. Because their prices do not change as much as other cryptocurrencies, they are widely used for payments and cross-border transfers.

The HKMA said stablecoins could be used for cross-border payments and digital banking systems for international banks. Industry players believe Hong Kong dollar-backed stablecoins could make payments faster, improve refunds, and offer clearer foreign exchange rates. Several major technology and financial companies have shown interest in applying for licenses.

At the same time, Beijing remains cautious. Regulators have also warned against the unauthorized issuance of yuan-backed stablecoins.

Experts say Hong Kong’s move is careful and controlled, not a major shift in China’s overall crypto policy. Instead of reversing the mainland ban, the city is introducing stablecoins in a limited and closely supervised way. Clear regulations may give international investors more confidence, but Hong Kong is not expected to allow an open or unrestricted crypto market.