Hong Kong clears path for first stablecoin licenses in Q1

Getting your Trinity Audio player ready...

Hong Kong is preparing to issue its first batch of licenses to stablecoin providers in the first quarter of this year, according to the special administrative region’s Financial Secretary Paul Chan.

Speaking at the World Economic Forum (WEF) in Davos last week, Chan reportedly told attendees that Hong Kong was ready to issue its first licenses since its stablecoin regime took effect on August 1 last year.

The ‘Stablecoin Ordinance’ was introduced in December 2024 with the aim of providing a supervisory and licensing regime for stablecoin providers, as well as handing enforcement powers over the sector to the Hong Kong Monetary Authority (HKMA), the city’s de facto central bank.

Beginning August 2025, issuers were required to obtain a license from the HKMA and comply with specific requirements, such as having a paid-up share capital of HK$25 million ($3.21 million), a segregated pool of reserve assets that must be of “high quality and high liquidity with minimal investment risk,” redemptions at par value, and anti-money laundering (AML) rules.

Stablecoin providers that fail to obtain a license and continue their activity, or who fall foul of the regime in some other way, may face fines of up to HK$5 million ($640,000) and even imprisonment.

The Hong Kong Finance Secretary did not elaborate on how many or which companies will be among the first batch of licensed stablecoin providers, but local outlet The Standard reported that 36 companies had already applied by September 2025.

Hong Kong hub

China implemented a ban on digital asset exchanges in 2017, shortly followed by a crackdown on mining operations in 2018 and then a ban on all “virtual currency” related transactions in 2021.

Hong Kong, by contrast, as the government noted in its January 21 press release, has issued licenses to 11 virtual asset trading platforms.

Beyond this, in January, the HKMA launched a new initiative to support local banks as they launch blockchain products. It was described as a “new supervisory arrangement” allowing local banks to “maximize the potential benefits of DLT adoption by effectively managing the associated risks.”

In June, the Hong Kong Securities and Futures Commission (SFC) announced plans to permit digital asset derivatives for professional investors, as part of a broader strategy to expand product offerings and reinforce the territory’s growing status as a fintech hub.

This was followed by the Hong Kong government releasing its “Policy Statement 2.0 on the Development of Digital Assets in Hong Kong,” which, among other measures, introduced the “LEAP” framework that doubles down on stablecoin and asset tokenization policies and unifies its regulatory framework for all virtual asset service providers (VASPs).

At Davos this week, Finance Secretary Chan also highlighted the government’s leadership role in promoting tokenization, including the issuance of three batches of tokenized green bonds amounting to around $2.1 billion.

The first cohort of stablecoin provider licenses, when they are made official later in Q1 of this year, will stand to further cement the territory’s credentials as a budding digital asset hub.

Watch | Tokenization in focus: Key insights from the Tokenize: LDN