Key Takeaways
- Hong Kong’s stablecoin ordinance entered into force on Aug. 1.
- Treasury Secretary Xu Zhengyu expects the first licenses to be granted by the end of the year.
- Potential applicants include technology firms and banks.
In the month since Hong Kong’s new stablecoin legislation entered into force, 77 firms have expressed their interest in applying for an issuer license, the Hong Kong Monetary Authority has reported.
Potential applicants include Chinese Big Tech firms, global stablecoin issuers, banks, and investment firms.
Potential Issuers Seeking HKMA Authorization
Several of the top contenders to receive Hong Kong’s first stablecoin licenses had already stated their intentions before the new law came into force.
These include participants in the HKMA’s stablecoin sandbox—RD InnoTech Limited, JD.com-affiliate JINGDONG Coinlink, and Anchorpoint Financial, a joint venture between Standard Chartered and Animoca Brands.
Alipay operator Ant Group is also pursuing authorization to issue HKD-pegged stablecoins.
According to local media outlets, HKMA officials said that as of Aug. 31, a total of 77 institutions had been in touch about a potential application.
First Approvals Expected This Year
While the HKMA register of licensed stablecoin issuers currently remains empty, Treasury Secretary Xu Zhengyu previously stated that he expects the first licenses to be granted by the end of the year.
For his part, HKMA Chief Executive Eddie Yue stressed that “the approval criteria are very high, and only a few licenses will be granted initially.”
“These discussions, expressions of interest, and applications for licenses do not constitute approval of any institution, nor do they constitute any endorsement of its prospects for obtaining a license,” he added.
RMB Stablecoins Next?
With Hong Kong expected to issue the first stablecoin licenses imminently, there are growing calls for Beijing to embrace the technology.
Technology firms including Ant Group have lobbied the Chinese government to use the new Hong Kong licensing regime as a platform for launching RMB-pegged stablecoins, a prospect that was recently endorsed by the state newspaper, China Daily.
Not everyone is on board with the idea, however.
Former People’s Bank of China Governor Zhou Xiaochuan recently came out against RMB-pegged coins.
Compared to China’s existing payment infrastructure, stablecoins offer little advantage and pose several unaddressed risks, he argued.
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James Morales is CCN’s blockchain and crypto policy reporter. He has been working in the news media since 2020, writing about topics such as payments, banking and financial technology. These days, he likes to explore the latest blockchain innovations and the evolving landscape of global crypto regulation.
With an educational background in social anthropology and media studies, James uses his platform as a journalist to explore how new technologies work, why they matter and how they might shape our future.
