Exclusive|HSBC, Standard Chartered tipped to win Hong Kong stablecoin licences in 2 weeks

HSBC and a joint venture led by Standard Chartered are expected to be among the first companies to obtain Hong Kong’s stablecoin licences within two weeks, according to people familiar with the matter. The number of licences and timetable had yet to be finalised and remained subject to change, but sources said a possible date was March 24. The two banks declined to comment. The Hong Kong Monetary Authority (HKMA) last month revealed that a small number of stablecoin licences would be granted this month after assessing 36 applications. The possible approval of established players reflects the city’s stringent approach to regulating stablecoins – cryptocurrencies typically pegged to a fiat currency – since its Stablecoin Ordinance took effect last August. Hong Kong is seeking to prevent potential destabilisation of the financial system amid the faster flow of money enabled by blockchain technology, while strengthening its bid to become a global digital asset hub. Hong Kong’s coming announcement of licensed stablecoin issuers follows China’s decision last month to explicitly ban the onshore tokenisation of real-world assets (RWAs), tighten scrutiny of related offshore activities and bar the issuance of yuan-pegged offshore stablecoins without authorisation. Industry sources said Hong Kong’s stablecoin licensing regime would likely focus initially on the local currency, with Standard Chartered having already stated plans to issue a Hong Kong dollar-pegged stablecoin. The potential approval of HSBC, Hong Kong’s largest bank by assets, comes as a surprise given that it did not participate in the HKMA-led stablecoin issuer sandbox, unlike its peer Standard Chartered. Instead, much of the attention had focused on its tokenisation projects, including tokenised deposits, which represent existing bank deposits as digital tokens on a blockchain. Sources said HSBC had been actively engaged with local and global players in the digital-asset space and was committed to playing a central role in Hong Kong’s evolving financial ecosystem. The bank’s CEO Georges Elhedery praised the city’s “comprehensive and safe regulatory environment” last month. He indicated that discussions with the regulator were ongoing but did not confirm whether the bank had submitted an application. Standard Chartered Bank, Animoca Brands and Hong Kong Telecommunications formed a joint venture to apply for a licence to issue a Hong Kong dollar-backed stablecoin, according to an announcement in February last year. The trio has been part of a HKMA-led stablecoin issuer sandbox since 2024, which allows limited-scale tests of stablecoins across scenarios such as e-commerce payments, cross-border trade settlements and tokenised asset trading. Two other entities – RD Technologies, a Hong Kong-based fintech firm founded by former HKMA CEO Norman Chan Tak-lam, and Jingdong Coinlink Technology, a subsidiary of Chinese e-commerce giant JD.com – are also in the sandbox. Over the past several months, both Beijing and Hong Kong have warned about the hype around stablecoins and RWAs, including the risk of scams, fraud and stock price speculation. In Beijing’s case, the tough stance aligns with its long-time capital controls and a cryptocurrency ban issued in 2021. However, experts said Hong Kong could serve as a testing ground for financial innovations such as stablecoins, especially amid competition with the US and tailwinds for the internationalisation of the yuan. “Hong Kong is a testing field for Chinese assets and money to go abroad on the blockchain,” said Raymond Chan, chairman of the Greater Bay Area FinTech League. “We are the firewall defending against challenges that may disrupt the market in China, thanks to our full set of regulations.”