Hong Kong stablecoin licenses are newly regulated under the Stablecoin Ordinance; major banks including HSBC and Industrial and Commercial Bank of China (ICBC) plan to apply, while Standard Chartered and ICBC are reported likely to receive first-round approvals, giving them an early market advantage.
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HSBC and ICBC intend to apply for Hong Kong stablecoin licenses.
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New rules impose strict custody and issuance standards and criminalize unlicensed retail promotion.
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At least 77 institutions expressed interest; regulators expect only a few initial licenses.
Hong Kong stablecoin license news: HSBC and ICBC to apply; stringent rules limit initial approvals — read the implications and next steps.
What is the Hong Kong stablecoin license and who is applying?
The Hong Kong stablecoin license is a new regulatory authorization under the Stablecoin Ordinance that governs fiat-referenced stablecoin issuance and promotion. HSBC and the Industrial and Commercial Bank of China (ICBC) have signaled plans to apply, with Standard Chartered and ICBC reported as likely first-round recipients.
How does the new Stablecoin Ordinance change issuance rules?
The Stablecoin Ordinance criminalizes offering or promoting unlicensed fiat-referenced stablecoins to retail investors and establishes strict capital, governance and custody requirements. Hong Kong regulators introduced a six-month transition period starting Aug. 1, 2025, and have since tightened custody standards, including guidance limiting smart-contract use in cold wallet implementations.
Market participants report the requirements are stricter than expected, and several firms experienced double-digit market corrections after the rules took effect. Plain-text references: Hong Kong Economic Journal, Cointelegraph, and Reuters have reported on industry reactions.
Industrial and Commercial Bank of China. Source: Wikimedia
Why are banks like HSBC and ICBC applying for stablecoin licenses?
Large incumbent banks view licensed stablecoin issuance as a route to capture emerging payments and tokenized-asset flows. A licensed framework provides regulatory clarity, enabling banks to offer fiat-referenced tokens to institutional and retail channels under supervised conditions.
Regulatory clarity can reduce counterparty and legal risk for banks and their clients. According to reports, 77 institutions expressed interest in applying, reflecting broad industry demand despite the high compliance bar.
What are the custody and security requirements under Hong Kong rules?
Hong Kong’s Securities and Futures Commission issued guidance tightening cryptocurrency custody standards. Key measures include robust cold-storage procedures, enhanced operational controls, and a prohibition on certain smart-contract-dependent cold wallet architectures.
Regulators have emphasized investor protection and fraud prevention. The SFC has warned that heightened speculation increases fraud risk and urged investors to exercise caution.
How will initial approvals be allocated and who may gain first-mover advantage?
HKMA officials indicated only a limited number of licenses are expected in early rounds. Industry reporting suggests Standard Chartered and ICBC are likely to receive initial approvals, potentially giving them a first-mover advantage in institutional stablecoin issuance in Hong Kong.
What does this mean for market participants?
Licensed issuers will need to meet high standards for capital, governance and custody, which may favor large banks with established compliance programs. Smaller firms face a challenging entry environment and may pivot to partnering models with licensed institutions.
Frequently Asked Questions
How many institutions showed interest in applying for licenses?
By the end of August, 77 institutions had reportedly expressed interest in applying for a Hong Kong stablecoin license, reflecting significant demand across banks and fintech firms.
Can unlicensed stablecoin promotions be offered to retail investors?
No. The Stablecoin Ordinance criminalizes the offering or promotion of unlicensed fiat-referenced stablecoins to retail investors in Hong Kong.
Key Takeaways
- New licensing regime: Hong Kong now requires stablecoin issuers to obtain a license under the Stablecoin Ordinance.
- Major banks applying: HSBC and ICBC have signaled intent to apply; Standard Chartered and ICBC are reported likely early approvals.
- High compliance bar: Strict custody and governance rules favor institutions with strong compliance and operational controls.
Conclusion
The Hong Kong stablecoin licensing regime marks a significant step toward regulated fiat-referenced digital tokens. Major banks such as HSBC and ICBC plan to apply, while initial approvals are expected to be limited, favoring well-capitalized incumbents. Market participants should prepare for stringent custody and governance requirements and monitor HKMA and SFC guidance closely. COINOTAG will continue to track developments and regulatory updates.
