Hong Kong Prepares to License Stablecoins

Hong Kong is approaching a key moment in its regulation of digital assets, as it prepares to issue its first licenses for stablecoin issuers. Eddie Yue, Chief Executive of the Hong Kong Monetary Authority (HKMA), revealed that the regulator has received 36 applications from companies interested in entering the stablecoin market. All submissions are currently under review, with the first licensing decisions expected in March 2026. However, only a very limited number of applicants will be approved in the initial phase.

The licensing process is being carried out under the Stablecoin Ordinance, legislation that came into force last year. The new law introduced clear rules for stablecoin issuers, aimed at protecting users, reducing systemic risk, and fostering innovation within a controlled regulatory environment. Hong Kong authorities are seeking to develop the digital finance sector while maintaining a cautious and responsible approach.

According to Eddie Yue, many companies submitted applications containing only basic information. As a result, the regulator has asked some applicants to provide additional documentation. The HKMA expects detailed disclosures on how stablecoins will be used, risk management frameworks, and the reserve assets intended to back issued tokens. Regulators are also assessing how companies manage customer funds and whether they are prepared to handle potential market crises.

The regulations require, among other things, a minimum paid-up capital of HKD 25 million. In the regulator’s view, a slower and more selective rollout is preferable to rapidly approving a large number of entities at once.

The issuance of stablecoin licenses is seen as an important step in strengthening Hong Kong’s position as a trusted hub for digital assets. Stablecoins play a crucial role in connecting the cryptocurrency market with traditional finance, supporting trading, payments, and cross-border transfers. At the same time, strict requirements may pose challenges for smaller firms. Authorities emphasize, however, that stability and security take precedence over rapid growth.

If the first phase proves successful, additional licenses may be granted later in the year.