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Hong Kong’s ambitions to position itself as a premier hub for digital assets have encountered a reality check, as its de facto central bank signalled a more measured approach to stablecoin regulation.
Hong Kong cools stablecoin hype
The Hong Kong Monetary Authority (HKMA) now expects the first licences for stablecoin issuers to be granted no earlier than 2026, despite earlier market expectations that approvals might arrive this year.
The city’s new stablecoin legislation, which will take effect on 1 August, establishes a formal licensing regime for issuers.
While this represents a significant milestone in Hong Kong’s bid to attract fintech investment, the HKMA has made clear that only “a handful” of licences will be issued in the first wave.
Darryl Chan, the HKMA’s deputy chief executive, told reporters that prospective licensees should submit initial applications by 30 September, with preliminary discussions to be held before 31 August.
Most early-stage applicants are exploring Hong Kong dollar- and US dollar–pegged stablecoins, although issuers planning tokens linked to offshore renminbi will be required to specify their intended use cases and reserve asset structures.
The announcement follows months of market exuberance triggered by the passage of the stablecoin bill in May.
Crypto-related stocks in Hong Kong have soared, with Guotai Junan International’s share price climbing 450% after it secured regulatory clearance to offer cryptocurrency trading services.
At least ten Hong Kong-listed companies raised more than $1.5bn through share placements in July alone, targeting investments in stablecoins, blockchain-based payment systems, and other digital asset ventures.
Such fervour has prompted the HKMA to caution against speculative excess.
The regulator issued a statement this week urging market participants to exercise restraint in public communications and to avoid making claims that could foster unrealistic expectations.
It also reiterated that no stablecoin licences have been issued to date.
The central bank’s stance reflects a balancing act between encouraging innovation and safeguarding financial stability.
Stablecoins have the potential to facilitate faster, cheaper cross-border payments, but they also pose operational, liquidity, and reputational risks if poorly managed.
By tempering the timeline for approvals, the HKMA appears determined to ensure that the first licence holders meet rigorous governance, reserve, and transparency standards.
For investors and fintechs betting on Hong Kong’s rapid emergence as a digital asset powerhouse, the message is clear: the city’s stablecoin regime will be a marathon, not a sprint.
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