HSBC and a consortium led by Standard Chartered have secured Hong Kong’s first licenses to issue stablecoins in the special administrative region.

The two banks, which are among the city’s three note-issuing lenders, will initially issue stablecoins pegged to the Hong Kong dollar (HKD), with planned use cases covering cross-border payments, local transactions and digital asset trading, the Hong Kong Monetary Authority said on Friday.

“The granting of stablecoin issuer licenses is an important milestone for the development of digital assets in Hong Kong,” HKMA Chief Executive Eddie Yue Wai-man said.

Yue said the regulatory framework is designed to provide an orderly environment for innovation while ensuring robust investor protection and sound risk management.

“We hope (the issuers’) promotion of regulated stablecoins will address pain points in financial and economic activities, create value for both individuals and businesses, and support the healthy development of digital assets in Hong Kong,” Yue added.

HKMA Deputy Chief Executive Darryl Chan Wai-man said there is no set timetable for issuing further licenses, adding that even if more licenses are granted, the number is expected to be limited.

HSBC said it plans to launch its HKD-pegged stablecoin in the second half of 2026. In its initial phase, the bank will support peer-to-peer transfers via PayMe, HSBC’s local mobile-payment platform, and the HSBC HK app; payments to merchants; and subscriptions to tokenized investment products using its stablecoin through its mobile banking app.

The lender also intends to explore issuing stablecoins denominated in other currencies, aiming to support cross-border transfers between Hong Kong and other well-regulated jurisdictions.

John O’Neill, HSBC’s group head of digital assets and currencies, said no decision has been made on which currency will be next. He said that any such move will require support and alignment of the relevant central banks before proceeding.

Anchorpoint Financial Ltd, the Standard Chartered-led joint venture formed with Hong Kong Telecommunications and Animoca Brands, said it aims to launch its HKD-pegged stablecoins in the second quarter. The first phase will target institutional clients, with broader access, including retail users, expected later this year.

Mary Huen Wai-yi, Standard Chartered’s CEO for Hong Kong, Greater China and North Asia, said the group plans to adopt “a phased approach” as it builds experience.

“We are not stopping with the Hong Kong dollar, but this is the starting point,” she said, adding that Standard Chartered has already seen “good use cases” for Hong Kong dollar-backed stablecoins.

The HKMA received 36 applications by Sept 30, the deadline for the first round of licenses. In assessing candidates, the regulator said it focused on applicants’ capability and experience in risk management, their commitment to compliance with rules and regulations in Hong Kong and other jurisdictions, and the viability of their proposed business models and use cases.

Hong Kong’s Stablecoins Ordinance, which took effect in August, introduces a licensing mechanism requiring that any individual or entity issuing a fiat-backed stablecoin in Hong Kong — or those pegged to the Hong Kong dollar, regardless of where they are issued — must secure a license from the HKMA. 

Contact the writer at irisli@chinadailyhk.com