In brief
- The Hong Kong Monetary Authority will issue licenses to stablecoin providers in the first quarter of 2026.
- Hong Kong brought in its stablecoin regime in August last year.
- The city is trying to strike a balance between welcoming providers and protecting investors.
Hong Kong will issue a batch of licenses to stablecoin providers in the first quarter of this year, Financial Secretary Paul Chan told World Economic Forum attendees in Davos on Tuesday.
This will be the first issued since Hong Kong’s new stablecoin licensing regime took effect on August 1 last year.
Companies offering or marketing stablecoins to retail investors must obtain approval from the Hong Kong Monetary Authority. The process includes meeting compliance requirements around reserve assets, redemptions at par value, segregation of client funds and following anti-money laundering rules.
Regulators have not disclosed which companies will be among the first batch of licensed stablecoin providers. As of September 2025, 36 companies have applied, according to local newspaper The Standard.
Among the known applicants is a joint venture between Standard Chartered, Animoca Brands and HKT. Ant Group’s Alipay and Chinese e-commerce giant JD.com were also part of an earlier stablecoin sandbox, but were reportedly told by mainland authorities to suspend their attempts for licensing in Hong Kong.
Chan’s visit to Davos is part of a wider push to raise Hong Kong’s profile as a fintech hub. Chan described Hong Kong’s approach to digital assets as “proactive yet prudent”.
“Financial innovations, such as digital assets, not only enhance transparency, efficiency, inclusiveness and risk management in financial services, but also facilitate more effective capital allocation to the real economy,” he said.
Stablecoins around the world
Interest in stablecoins has ramped up globally. With a market cap of $309 billion, according to DefiLlama, the technology has attracted the interest of finance giants from JP Morgan and Bank of America to Paypal and Visa.
Within the crypto industry, there have been calls from the likes of Ethereum co-founder Vitalik Buterin for “better decentralized stablecoins” that are more resilient and less dependent on the dollar.
Paul Faecks, CEO of Plasma, told Decrypt that the focus for developing the stablecoin industry should be on “creating open, neutral rails that anyone can build on, while still being robust enough to power global payments for everyday people and retailers”.
“As the stablecoin space continues to grow, mature, and gain institutional acceptance, the real consumer and retail applications for the technology will be unlocked, and it will become highly relevant in day-to-day life for millions of people,” he said.
On prediction market Myriad, owned by Decrypt‘s parent company Dastan, users are cautious on the short-term prospects for stablecoins, placing just a 3% chance on the market cap of all stablecoins topping $360 billion this month.
Hong Kong and crypto
Hong Kong’s efforts to become a global Web3 hub have been met with mixed success as it focuses on integrating crypto into the traditional finance industry. It has brought in licensing regimes not just for stablecoin issuers but also exchanges, while rules for over the counter crypto exchange are also in the works. Since 2023, it has granted licenses to 11 trading platforms.
The government has also promoted tokenization through the issuance of $2.1 billion worth of tokenised green bonds. It was also one the first jurisdictions to offer spot ETFs for Bitcoin and Ethereum at the start of 2024.
But it has had to contend with several crypto-related financial scandals. Most notably among them was the 2024 collapse of the exchange JPEX, in which customers lost some $205 million in funds. It has been dubbed the city’s largest-ever fraud case.
In November, Hong Kong authorities brought charges against 16 people linked to the exchange, including influencers who promoted JPEX. Courts will hear the first cases in March.
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Source: https://decrypt.co/355304/hong-kong-set-to-issue-first-stablecoin-licenses-in-q1-2026
