Hong Kong moves closer to licensing stablecoin issuance

Our Asian friends are about to have a National Stablecoin.

Hong Kong is on track to become one of the first major financial centers to officially license stablecoins under a comprehensive legal framework.

Financial Secretary Paul Chan confirmed in his 2026-2027 Budget speech on February 26 that the Hong Kong Monetary Authority (HKMA) will begin issuing its first batch of licenses for issuing fiat-backed stablecoins next month (March 2026).

• Secured 100% by high-quality liquid assets (cash, short-term government securities, central bank deposits).

• Strictly separate client funds and withdrawal privileges.

• Strong control, governance, and risk management in anti-money laundering/counter-terrorism financing.

• Confirm and publish regular inventory levels.

This milestone follows the issuance of the Stablecoin Ordinance (Chapter 656) in August 2025 and the conclusion of the initial application review phase. HKMA Chief Executive Eddie Yue previously stated in early February that the agency had received approximately 36 expressions of interest and was finalizing assessments for a handful of high-quality applicants expected to receive initial approval.

Competitive positioning in Asia

Hong Kong's move comes amid fierce competition among financial centers to attract investment in digital assets. Singapore has pushed for regulations on payment tokens, the European Union has implemented MiCA, and US lawmakers are debating a legal framework for stablecoins.

By granting licenses early and transparently, Hong Kong signals certainty in its regulations—a powerful magnet for institutional investors seeking clarity rather than ambiguity.

This strategy reinforces the city's broader ambition to maintain its role as a gateway between global capital markets and blockchain technology innovation.

Expanded Digital Asset Roadmap

Financial Secretary Chan used his budget speech to outline further steps to solidify Hong Kong's position as Asia's leading managed virtual asset hub:

• CMU OmniClear Holdings (a subsidiary of HKMA) will develop new infrastructure for tokenized bonds and other real assets (RWA), with plans to interoperate with regional tokenized platforms.

• Laws for licensing cryptocurrency dealers and custodians will be enacted by the end of 2026, supplementing existing rules on virtual asset trading platforms (VATPs).

• Guidance on tokenized securities and upgrades to the EnsembleTX wholesale CBDC platform to support regulatory-compliant tokenized asset scenarios.

These initiatives build on Hong Kong's previous achievements: licensing more than 10 VATPs, approving spot cryptocurrency ETFs (including Ether and Bitcoin products), and establishing the issuance of tokenized green bonds.

Our review

The licensing of stablecoin issuance in Hong Kong is not simply a matter of cryptocurrency policy but also impacts the monetary infrastructure. Stablecoins are increasingly functioning as programmable digital currencies, and the jurisdictions that regulate them will effectively position themselves within the next-generation payment architecture.

This move also implicitly contrasts with mainland China's CBDC-based strategy, emphasizing Hong Kong's hybrid model: privately regulated stablecoins operating alongside the traditional banking system.

Hong Kong's decision to issue its first stablecoin next month marks a significant step forward in digital financial governance. By formalizing oversight at the issuance level, the city is solidifying its role as a compliance-oriented yet innovation-friendly hub for blockchain-based financial infrastructure.

Disclaimer: The information presented in this article is the author's personal opinion in the field of cryptocurrency. This is not financial or investment advice. All investment decisions should be based on careful consideration of your personal portfolio and risk tolerance. The views expressed in this article do not represent the official stance of the platform. We recommend that readers conduct their own research and consult with experts before making any investment decisions.

Compiled and analyzed by HCCVenture

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