HSBC, Standard Chartered close in on first Hong Kong stablecoin licenses

HSBC and a joint venture led by Standard Chartered are expected to be among the first to obtain Hong Kong stablecoin licenses as soon as March 24, after the Hong Kong Monetary Authority reviewed 36 applications, according to people familiar with the process. The number of approvals and the timing remain subject to change. Both banks declined to comment. The HKMA indicated last month that a small number of licenses would be issued in March following an initial assessment under the city’s Stablecoin Ordinance, which took effect in August 2023.

Industry contacts anticipate the first phase will prioritize Hong Kong dollar-pegged stablecoins. Standard Chartered, Animoca Brands and Hong Kong Telecommunications formed a joint venture last year to seek a license to issue an HKD-backed token and have been taking part in an HKMA-led sandbox since 2024. The sandbox permits limited tests in e-commerce payments, cross-border trade settlement and tokenized asset trading. RD Technologies, founded by former HKMA chief executive Norman Chan Tak-lam, and Jingdong Coinlink Technology, a subsidiary of JD.com, are also participating.

A potential approval of HSBC would stand out because the bank did not join the sandbox. Instead, HSBC has been running tokenization projects, including tokenized deposits that represent existing balances as digital tokens on a blockchain. People with knowledge of the matter note that the bank has been working with local and global partners in digital assets. Last month, CEO Georges Elhedery described Hong Kong’s regulatory environment as “comprehensive and safe” and indicated discussions with the regulator were ongoing, without confirming whether an application had been filed.

The licensing effort reflects tighter oversight of stablecoins-digital tokens typically linked to a fiat currency-intended to reduce risks to the financial system while advancing the city’s digital asset agenda. Regulators in Hong Kong and mainland China have recently warned about hype around stablecoins and tokenized real-world assets, pointing to risks such as scams, fraud and stock price speculation.

In February, mainland authorities banned onshore tokenization of real-world assets, increased scrutiny of related offshore activities and barred the issuance of yuan-pegged offshore stablecoins without authorization. Hong Kong is proceeding with a licensing framework that initially emphasizes local-currency stablecoins.

If granted, licenses would bring established financial institutions into a segment historically dominated by crypto-native issuers and would subject licensees to capital, reserve, disclosure and operational requirements set out by the ordinance and forthcoming HKMA rules. The sandbox is testing real-world scenarios, including retail payments and cross-border trade, to assess operational controls, reserve management and consumer safeguards before any broader rollout.

Raymond Chan, chairman of the Greater Bay Area FinTech League, characterizes Hong Kong as “a testing field for Chinese assets and money to go abroad on the blockchain” and calls it “the firewall defending against challenges that may disrupt the market in China, thanks to our full set of regulations.”

People familiar with the process expect the initial batch of licenses to be small, with further approvals possible after the regulator reviews testing outcomes and compliance readiness. Launch timelines, coin structures and reserve arrangements will align with the ordinance and detailed supervisory guidance once licenses are granted.