Hong Kong Grants First Stablecoin Licenses to Two Major Banks

Hong Kong is moving closer to a regulated stablecoin market. The city's financial authority handed out its first licenses to issue stablecoins. Only two companies got approved from a pool of 36 applicants. The winners are HSBC (a British bank with deep roots in Hong Kong) and a joint venture called Anchorpoint Financial, which is backed by Standard Chartered, a London-based bank with deep roots in Asia and Africa.

If you're wondering why this matters, stablecoins are digital tokens designed to hold a fixed value. In this case, both companies will issue coins tied to the Hong Kong dollar. Think of them as digital versions of cash that can move around on blockchain networks much faster than traditional bank transfers.

HSBC plans to launch its stablecoin in the second half of this year. The first phase will focus on person-to-person transfers and payments to merchants.

The rules are strict. Issuers need at least HK$25 million in capital. Every stablecoin in circulation must be fully backed by cash or safe assets. No algorithmic stablecoins allowed, which use code instead of cash reserves to maintain their value, and have a history of failing spectacularly. They want bank-led, regulated stablecoins, not a free-for-all.

Hong Kong is one of the first places in the world to grant formal stablecoin licenses to banks. The EU started regulating stablecoins under MiCA in 2024, but Hong Kong is one of the first to issue licenses specifically for bank-issued, fiat-backed stablecoins at this scale. The bet is that bank-issued, HKD-backed tokens might find a use in regional trade and payments. The question is whether anyone will actually use them.