Analysts and investors say the Hong Kong Monetary Authority’s (HKMA) cautious issuance of only two stablecoin licences to traditional banks prioritises risk control but limits Hong Kong’s digital asset ambitions. The market had expected at least three licences for issuers from broader backgrounds.
The Hong Kong Monetary Authority (HKMA) recently issued only two stablecoin licences, both to traditional banks, surprising the market. HSBC and Standard Chartered are noted in connection with the approvals.
“It came as a surprise that only two licences were issued, and both to traditional banks,” said Kenny Ng Lai-yin, a strategist at Everbright Securities International. “The market had expected the authority to issue at least three licences for stablecoin issuers from a broader range of backgrounds.”
Unlike highly volatile cryptocurrencies such as bitcoin and Ethereum, stablecoins are typically pegged to fiat currencies or other reference assets, combining the efficiency of digital assets with the stability of traditional money. Hong Kong’s Stablecoin Ordinance, one of the world’s earliest such laws, came into effect in August last year, reinforcing the city’s ambitions to become a global digital asset hub.
Analysts say the HKMA’s cautious approach prioritises risk control but limits Hong Kong’s digital asset ambitions, with calls to expand the rules for greater financial innovation.
