Hong Kong 🇭🇰 Stablecoin License Explained, Understand in One Read 👇🏼

Hong Kong has established a dual-track framework for stablecoin regulation, coordinated by the HKMA and SFC, with different licenses corresponding to different businesses. The core differences lie in the regulatory body, business scope, compliance thresholds, and technical requirements. Below is a detailed correspondence and difference analysis:

📋 1. License Correspondence and Regulatory Body

Business Type	Corresponding License	Regulatory Body	Core Requirements
Stablecoin Issuance	HKMA Stablecoin License (SVE License)	HKMA	Paid-in capital ≥ 25 million HKD, 100% high liquidity reserve assets, asset segregation, local entity establishment
Trading Platform Operation	VATP License (VASP+1 License +7 License)	SFC	Requires 1 type (securities trading) +7 type (automated trading) licenses, strict KYT/AML risk control
Virtual Asset Trading	VASP+1 License	SFC	Only VASP license limits non-securities token trading; adding 1 license can cover security tokens
Investment Advisory Services	VASP+4 License	SFC	Only institutions holding 4 licenses can provide security-type stablecoin analysis advice
Asset Management	VASP+9 License	SFC	If virtual assets account for ≥10% of the portfolio, a 9 license upgrade is required; security-type stablecoin management requires additional authorization
Exchange/Payment	MSO/SVF License	HKMA	MSO (money service) has lower thresholds; SVF (stored value payment) requires reserve fund custody and redemption guarantee

⚖️ 2. Key Difference Analysis

Regulatory Objectives and Business Positioning

HKMA Stablecoin License: Focuses on payment functions and financial stability, requiring issuers to ensure 1:1 redemption capability and reserve transparency.
SFC Licenses (1/4/7/9 types): Targets securities-related activities such as trading matching, asset management, and investment advisory, emphasizing investor protection and market compliance.

License Application Thresholds

Capital and Asset Requirements:
- Stablecoin Issuance: Requires 25 million HKD paid-in capital +100% high liquidity reserves.
- Trading Platform (VATP): Technical investment exceeds 100 million HKD, asset insurance purchase required.
Business Restrictions:
- Holding only a VASP license cannot trade security tokens, 1 license is required; if stablecoins are defined as securities, SFC's full set of rules apply.

Technical Compliance Focus

Stablecoin issuers need to have real-time AML screening systems and on-chain redemption channels.
Trading platforms need to support KYW (wallet verification) and cold-hot wallet segregation.

🚀 3. License Coordination and Application Status

License Stacking Mechanism:
For example, after a bank issues a HKD stablecoin (requiring an HKMA license), if it is traded on a platform holding a VATP license, the platform must also meet SFC's 1/7 type requirements.
Current Progress:
- Stablecoin License: In sandbox testing (3 institutions including JD, Standard Chartered), the first batch of licenses is expected to be issued in 2025Q4, with ≤5 licenses.
- SFC License Upgrade:
  - 42 institutions have obtained VASP+1 licenses (e.g., CMB International);
  - 11 have obtained VATP licenses (e.g., OSL).

💎 4. Summary: How to Choose a License?

Issuing Stablecoins→HKMA License (strict control of reserves and redemption capability).
Operating Trading Platforms→VATP License (large technical investment, but can cover all types of tokens).
Lightweight Services:
- Investment advisory chooses VASP+4 License;
- Payment exchange chooses MSO License (lower cost).

💡 Practical Advice: If the business involves multiple links (such as issuance + asset management), "dual licensing" (HKMA+SFC) is required. Currently, brokerage and bank institutions (such as Bank of China Hong Kong) are more likely to be approved due to their clearing capabilities and compliance foundation.

Related Stock Summary:

Stablecoin Issuance Applicants Related: Yuan Coin Technology related ($ZA ONLINE(06060.HK), $Z FIN(01168.HK), etc.), $JD-SW(09618.HK), $STANCHART(02888.HK), domestic state-owned enterprises, etc. applicants;
Hong Kong Virtual Asset Exchanges (holding VATP licenses):$OSL GROUP(00863.HK), $HKE HOLDINGS(01726.HK) $LIANLIAN(02598.HK), $Futu(FUTU.US), $PUXING ENERGY(00090.HK) (holding Hashkey);
Stablecoin Downstream Application Scenarios:$YEAHKA(09923.HK), $GOLDSTREAM INV(01328.HK), $LIANLIAN(02598.HK)
RWA Related:$YUNFENG FIN(00376.HK), $DL HOLDINGS GP(01709.HK), $EASOU TECH(02550.HK), $VOBILE GROUP(03738.HK), $LINKLOGIS-W(09959.HK), $DMALL(02586.HK)
Upgrade 1 License, Access Virtual Asset Trading:$GUOTAI JUNAN I(01788.HK), $Futu(FUTU.US), $CM BANK(03968.HK), $VICTORY SEC(08540.HK), etc.;

Personal opinion, not investment advice