Authorities in Hong Kong are taking a cautious approach to the stablecoin licensing regime as top banks and major firms race to secure approval.
Summary
- Hong Kong regulators confirmed that only a few stablecoin licenses will be granted despite high demand.
- Major banks and corporations, including ICBC, Bank of China, Standard Chartered, and PetroChina, have reportedly expressed interest.
- Lawmakers stressed that strict requirements will apply, especially amid rising fraud risks
Stablecoins are gaining traction in Hong Kong. According to a recent local media report, more than 77 firms have expressed interest in obtaining stablecoin licenses, but the Hong Kong Monetary Authority remains firm that only a few will be approved.
The Hong Kong arm of the Industrial and Commercial Bank of China (ICBC) recently joined the list of hopefuls, making it the second major bank to express interest after the Hong Kong Bank of China. Other names include Standard Chartered and PetroChina, pointing to strong demand among major players.
Legislators, however, stressed that rising demand will not guarantee approval and only entities meeting strict requirements will be considered.
“The number of licenses to be issued will be very small,” one Member of the Legislative Council reportedly said, adding that only one firm may receive approval in the first batch of permits next year.
Earlier reports also suggested that regulators were considering an invite-only licensing model, relying on an exclusive vetting process for potential issuers. The cautious stance is part of broader efforts to manage the surge of firms seeking to launch stablecoins, ensuring proper oversight and reducing risks of misuse.
Hong Kong regulators flag fraud risks on stablecoin law
As reported earlier by crypto.news, the SFC and HKMA recently warned that fraud risks have been rising since the stablecoin law took effect on August 1.
Authorities received 265 complaints in the first half of the year related to fraud and other digital asset crimes, with stablecoin activity flagged as a growing concern. These risks have reinforced the cautious licensing approach, as regulators aim to prevent financial fallout and protect Hong Kong’s market reputation.
Meanwhile, prospective applicants face a tight timeline. The HKMA has urged all interested firms to submit full applications by September 30 for consideration, though final approvals are unlikely to come this year.
Source: https://crypto.news/hong-kong-to-issue-only-a-few-stablecoin-licenses-as-local-interest-intensifies/
