With the "Stablecoin Regulation" officially coming into effect on August 1, 2025, the Hong Kong Monetary Authority (HKMA) has released the "Regulatory Guidelines for Licensed Stablecoin Issuers," clarifying the various thresholds for issuer license applications. In this fierce competition for licenses, issuers such as Bank of China (Hong Kong) and Standard Chartered Bank (Hong Kong) are expected to be the first to apply for and obtain stablecoin issuer licenses, becoming the market focus. Meanwhile, Chinese-funded banks, sandbox testing companies, large central state-owned enterprises, and major internet companies are also actively preparing to apply, indicating that the Hong Kong stablecoin market is about to usher in a new landscape.
- Issuers Compete for the Lead: Bank of China and Standard Chartered Expected to Be First Approved
According to Chinese media reports, the Hong Kong Monetary Authority has released the "Regulatory Guidelines for Licensed Stablecoin Issuers," clarifying the various thresholds for issuer license applications.
Advantages of Issuers: Bank of China (Hong Kong), Standard Chartered Bank (Hong Kong), and other issuers are expected to be the first to apply for and obtain stablecoin issuer licenses. These banks possess deep compliance experience, strong financial strength, and a broad customer base in the traditional financial sector, giving them a natural advantage in the stablecoin license application process.
Chinese-funded Banks and Giants Entering the Market: In addition to issuers, Chinese-funded banks, sandbox testing companies, large central state-owned enterprises, and major internet companies are also actively preparing to apply. As of the end of July, 44 financial institutions have upgraded to the No. 1 securities trading license, demonstrating the market's high enthusiasm for Hong Kong stablecoin licenses.
Brokerage Services: Initially, brokerages will mainly provide services such as stablecoin trading, custody, and financing. Recently, Guotai Junan International successfully issued the first public digital native bond by a Chinese-funded brokerage through HSBC's Orion platform, with a scale not exceeding $300 million and a term of 3 years, serving as the lead global coordinator and settlement agent. This bond is issued based on distributed ledger technology (DLT), featuring digitization, programmability, and automatic execution, aimed at enhancing transaction transparency and reducing settlement risks and costs.
- Hong Kong's "Stablecoin Regulation": The World's First Comprehensive Regulatory Framework
Song Ke, Executive Vice President of the Shenzhen Research Institute of Renmin University of China, stated that Hong Kong's "Stablecoin Regulation" is the world's first comprehensive regulatory framework for fiat stablecoins. Globally, this regulation has a demonstrative effect on stablecoin policy formulation.
Prohibition of Unlicensed Operations: Hong Kong's "Stablecoin Regulation" will officially come into effect on August 1, prohibiting unlicensed entities from operating stablecoin businesses in Hong Kong. Violators may face fines of up to HKD 50,000 and imprisonment for six months. Legislative Council member Qiu Dagen stated that after the regulation takes effect, it will be illegal for unlicensed platforms to sell USDT and USDC to retail investors, while existing stablecoins can be traded on licensed platforms.
Regulatory Details: The "Regulatory Guidelines for Licensed Stablecoin Issuers" released by the Hong Kong Monetary Authority require licensed stablecoin issuers to "ensure that they do not issue or offer specified stablecoins in jurisdictions where trading of specified stablecoins is prohibited" and that "licensees should implement control measures to mitigate the risks of remote customer identity verification procedures and location masking (e.g., using virtual private networks, VPNs) during daily operations."
OTC Market: Chinese media have found that many street cryptocurrency exchange shops (OTC) in Hong Kong are still operating normally, with some staff indicating that they have not yet received any business change notifications. Currently, the exchange of USDT, USDC, and other stablecoins at these shops remains a regulatory blind spot, and they may need to apply for special licenses in the future. The Hong Kong SAR government is conducting a public consultation on the licensing system for over-the-counter trading services, which will end on August 29.
- The Qian Fenglei Incident as a Warning: Compliance and Risks Coexist
While Hong Kong actively promotes the compliance of virtual assets, the market must also be vigilant against the actions of illegal actors.
Warning on Suspicious Investment Products: According to official pages, a series of Web3 investment products launched by Qian Fenglei have been listed on the Hong Kong Securities and Futures Commission's website as suspicious investment products, including two funds under the FO-X ecosystem launched by Hengfeng International, Fo Coin, and Paradise NFT (Peach Blossom Source NFT). This serves as a reminder to investors to verify information through official channels and be cautious of unlicensed investment products when participating in virtual asset investments.
- Strategic Significance of Stablecoins: Reducing Dependence on the US Dollar Clearing and Settlement System
Song Ke believes that after the implementation of the "Stablecoin Regulation," relevant institutions will be able to quickly transform the pilot experiences accumulated in the early stages into actual products, accelerating the formation of the stablecoin ecosystem in Hong Kong. Additionally, by promoting the digital renminbi and Hong Kong dollar stablecoins, dependence on the US dollar clearing and settlement system can gradually be reduced.
Conclusion:
The official implementation of Hong Kong's "Stablecoin Regulation" marks a solid step forward in stablecoin regulation. Issuers like Bank of China and Standard Chartered are expected to be the first to obtain licenses, injecting strong traditional financial power into the Hong Kong stablecoin market. However, alongside the market's high enthusiasm, vigilance against illegal actors is necessary, as well as attention to the regulatory direction of the OTC market. This move by Hong Kong will not only consolidate its position as an international financial center but also provide an important reference model for the development of global digital finance, potentially reducing dependence on the US dollar clearing and settlement system in the future.
Related: Hong Kong's Stablecoin Regulation Exam is Coming: The First Batch of Licenses to Be Issued in Early 2026, KYC Real-name System Becomes a Must-pass Threshold
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Original Article: “The Battle for Hong Kong Stablecoin Licenses: Bank of China, Standard Chartered, and Other Issuers Compete for the Lead, Who Will Be Approved First?”
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