TLDR
- Hong Kong has not issued any HKD stablecoin licenses after the March target passed.
- Financial Secretary Paul Chan Mo-po said authorities would begin issuing licenses in March.
- The Hong Kong Monetary Authority has not announced any approved stablecoin issuers.
- An HKMA spokesperson said the authority is actively advancing the licensing process.
- Reports suggested HSBC Standard Chartered and Animoca Brands’ venture could receive early approvals.
Hong Kong has not issued any HKD stablecoin licenses after its March target passed without approvals. Officials had signaled that the rollout would begin in March. However, the Hong Kong Monetary Authority has yet to confirm any licensed issuer.
Hong Kong Delays HKD Stablecoin Licensing Rollout
Financial Secretary Paul Chan Mo-po said in February that authorities would start issuing licenses in March. He spoke at Consensus Hong Kong and outlined the city’s regulatory plans. He said regulators would assess each applicant based on strict standards.
“In giving our licenses, we ensure that licensees have novel use cases, a credible and sustainable business model, and strong regulatory compliance capabilities,” Chan said. He confirmed that authorities would only approve firms that meet compliance rules. However, the HKMA has not announced any approvals since March ended.
An HKMA spokesperson addressed the delay in a statement to CoinDesk. The spokesperson said the authority continues to advance the licensing process.
“The HKMA is actively taking forward the licensing matter and will announce further details in due course,” the spokesperson said.
Banks Linked to Hong Kong Dollar Framework Await Approval
Local media reported in March that HSBC and a joint venture between Standard Chartered and Animoca Brands could receive early approvals. The South China Morning Post cited market expectations around these firms. However, regulators have not confirmed any license recipients.
HSBC and Standard Chartered operate as note-issuing banks in Hong Kong. This status links them directly to the Hong Kong dollar’s issuance system. The structure connects private banks with the government’s Exchange Fund.
The framework traces back to 1846, when private banks issued currency backed by silver deposits. At that time, the city had no central bank. Commercial banks issued notes in exchange for deposited silver.
Today, each note-issuing bank deposits U.S. dollars with the Exchange Fund at HK$7.80 per $1. In return, the bank receives Certificates of Indebtedness. The bank then prints Hong Kong dollar banknotes against those certificates.
HKMA Chief Executive Eddie Yue referenced this history in a December 2023 blog post. He compared early private banknotes with modern stablecoins. He wrote that pre-1935 banknotes functioned as a form of “private money.”
Yue said stablecoins serve as blockchain-based equivalents of that system. He described them as tokens with stable value that can function as a medium of exchange on-chain. His comments linked digital tokens with Hong Kong’s existing monetary model.
Authorities have not provided a specific reason for the missed March timeline. The HKMA has not set a new public date for approvals. Officials have stated that they will release updates when ready.
