Licensing Stablecoins in Hong Kong

Over the past few months, Hong Kong’s stablecoin framework has quietly crossed an important threshold.

On 2 February 2026, HKMA Chief Executive Eddie Yue confirmed that the regulator expects to grant “a very small number” of licences to issuers of fiat-referenced stablecoins under the Stablecoins Ordinance, which came into force on 1 August 2025.

With 36 applications submitted in the first round, initial approvals are expected as early as March 2026.

From experimentation to financial infrastructure

For the past few years, stablecoins have lived in an in-between space: part payments innovation, part crypto experiment. That ambiguity is now ending.

HKMA’s approach makes clear that stablecoin issuance is being treated as financial infrastructure, not as a fintech side project. The implications extend well beyond token design. Issuers are being assessed on whether they can operate safely at scale, under stress, and under supervision.

The regulator has been explicit about what it expects to see:

• a defensible, real-world use case rather than speculative issuance

• robust operational, financial, and liquidity risk management

• effective AML and sanctions controls

• high-quality, liquid, and well-governed reserve backing

• demonstrated technical and organisational capability to operate continuously

The fact that many applicants were deemed not operationally ready is telling. Issuing a stablecoin is not just about deploying smart contracts. It requires governance, accountability, and institutional maturity.

Why “a very small number” is the right outcome

By creating a tightly supervised group of issuers, HKMA is effectively establishing a regulated trust anchor for the market. Several consequences flow from this:

First, market concentration is intentional. Banks, payment firms, and other regulated institutions will naturally prefer to interact with fully licensed issuers. Trust will cluster where supervision is strongest.

Second, compliance becomes a design feature, not a retrofit. Licensing upfront reduces the need for reactive enforcement later, and forces issuers to build controls before scale, not after.

Third, jurisdiction and enforceability are central. Licensed issuers are squarely within HKMA’s supervisory perimeter.

What this reinforces for compliance teams

This development aligns closely with themes that have surfaced repeatedly in recent industry discussions:

First, transparency is not the same as accountability. Public blockchains provide visibility, but visibility alone does not manage risk. Without clear governance, identity, and legal authority, transparency has limits.

Second, jurisdiction still matters. The ability to freeze, seize, or remediate depends on enforceable legal frameworks, not just on smart-contract functionality. Stablecoin structures that rely on reserves or operations in opaque or non-cooperative jurisdictions expose real weaknesses.

Third, core principles endure, even as environments change. As reinforced by the Wolfsberg guidance, KYC, sanctions screening, and transaction monitoring do not disappear in tokenised environments. They now need to operate coherently across both on-chain and off-chain activity.

Fourth, future-proofing is about integration, not reinvention. Effective frameworks combine traditional due-diligence disciplines with blockchain analytics, regulatory alignment, and digital-asset literacy across compliance, risk, and operations teams.

Looking ahead

HKMA’s message is clear: stablecoins will be allowed to scale in Hong Kong, but only under conditions of credibility, enforceability, and trust.

For financial institutions and compliance professionals, this is a constructive development. It reduces ambiguity, raises standards, and makes it easier to distinguish between infrastructure that can be relied upon and experimentation that cannot.

Thanks for reading,
Alexey