Hong Kong’s financial watchdog will grant a first batch of “very few” stablecoin issuer licenses in March, according to Reuters.

Eddie Yue, the chief executive of the Hong Kong Monetary Authority (HKMA), said he expects to issue the first series of stablecoin issuer licences in March, while addressing a Hong Kong Legislative Council meeting on Monday.

However, he said only a "very small number" would be approved initially.

Stablecoins, a subset of cryptocurrencies with prices anchored to fiat money like the U.S. dollar, seeing increasing adoption worldwide, as the world's major jurisdictions put regulatory frameworks in place. Last year, stablecoins moved $35 trillion on blockchain rails.

Currently a $300 billion asset class, Citi projected stablecoins to become a $1.9 trillion to $4 trillion market. Standard Chartered CEO Bill Winters said that Hong Kong's push into tokenized money and stablecoins could lay the foundation for a new era of digital trade settlement.

Yue noted that the review process for applications is nearing completion.

The head of the HKMA highlighted that the criteria for stablecoin issuer license approval assessments focused on issues such as risk management, anti-money laundering measures, and the backing assets of the stablecoins.

He also said licensed issuers must comply with local regulations for cross-border activities, adding that mutual recognition agreements with other jurisdictions could be explored in the future.