Over 50 companies in Hong Kong intend to apply for stablecoin licenses: licenses are scarce and competition is intense.

With the Hong Kong "Stablecoin Ordinance" officially coming into effect on August 1, Hong Kong has taken a crucial step in the regulation of virtual assets. This policy not only provides a clear compliance pathway for stablecoin issuance entities but has also sparked tremendous enthusiasm in the market. According to local media reports, there are currently 50 to 60 companies interested in applying for a stablecoin license in Hong Kong, half of which are payment institutions, and the other half are well-known internet companies, most of which have Chinese capital backgrounds. However, the industry estimates that only 3 to 4 licenses will be issued in the first phase, which means that licenses will be scarce, and competition will be exceptionally fierce.

1. The surge in stablecoin license applications: over 50 companies are eager to get started

The Secretary for Financial Services and the Treasury of Hong Kong, Mr. Christopher Hui, stated in an interview that the first phase will only issue a small number of stablecoin licenses. He pointed out that the legislation does not limit the types of pegged currencies, but if it involves currencies from other regions, discussions with relevant institutions may be necessary. The government released the Digital Asset Development Policy Declaration 2.0, which also suggests promoting the "tokenization" of financial assets. Mr. Hui indicated that Hong Kong already has experience in issuing tokenized green bonds, and the next step is to extend this to exchange-traded funds (ETFs). He believes that the trading of commodities such as metals could also be explored for token payments.

Famous companies accelerate the pursuit of digital assets:

Lianlian Digital (02598 HK): Announced on July 13 that it plans to place 38.4 million new H shares, expecting to raise HKD 394 million. The net proceeds are intended for innovation and application of blockchain and other innovative technologies in the global payment field, global business and license expansion, and general corporate purposes. Lianlian Digital is one of the first digital technology companies in China to provide a wide range of payment solutions globally.

Hafu Securities: Hafu Securities, a subsidiary of Dongfang Caifu, has been approved by the Hong Kong Securities and Futures Commission in June 2024 to provide virtual asset trading services through a comprehensive account arrangement.

Greenland Holdings: Greenland Holdings has issued an announcement regarding abnormal fluctuations in stock trading. Recently, media reported that the company's Hong Kong subsidiary is involved in matters related to virtual assets. Following a self-inspection by the company, it was found that the subsidiary's operating revenue for 2024 accounts for less than 1% of the company's total operating revenue, and it does not have a significant impact on the company's production and operation.

II. Hong Kong's Stablecoin Regulatory Framework: Balancing Stability and Innovation

On May 21, 2025, the Hong Kong Legislative Council officially passed the "Stablecoin Bill," which will be published in the Gazette on May 30, 2025, and implemented within the year 2025. Following the progress of the Legislative Council, the Hong Kong Monetary Authority (HKMA) issued two consultation papers on May 26, clarifying the anti-money laundering responsibilities and counter-terrorism obligations of licensed stablecoin issuers, as well as covering security information architecture and operational information. The "Stablecoin Bill" marks a milestone in the regulation of virtual assets in Hong Kong, and this legislation will form the legal foundation of Hong Kong's stablecoin market, along with the future officially released "Anti-Money Laundering Consultation Paper" and "Regulatory Guidance Consultation Paper."

Fiat Currency Support Principles: The regulations clearly state that any "specific stablecoin" must be fully redeemable in its pegged fiat currency, especially the Hong Kong dollar. The Monetary Authority requires that reserve assets must be high-quality, liquid assets (such as cash and short-term government bonds) and denominated in the same fiat currency to which the stablecoin is pegged, eliminating the risk of currency mismatch.

Comprehensive Prudential Licensing: The regulation introduces a comprehensive prudential licensing system, emphasizing the systemic importance of stablecoin issuers, including strict requirements such as minimum paid-up capital (HKD 25 million), reserve structure, segregation and legal protection, redemption mechanisms, and governance review.

The strong supervision of the Monetary Authority: The supervisory powers of the Monetary Authority are equipped with strong tools, including investigative authority, sanction mechanisms, management interventions, and adjudication mechanisms. The regulations clearly specify the activities that participants in the virtual asset market are prohibited from engaging in, and clarify criminal liabilities.

International Comparison and Differentiation Positioning: Compared to the EU MiCA, Singapore's Payment Services Act 2019, and the state-level remittance licensing systems in the United States, Hong Kong's regulations demonstrate unique regulatory choices, such as mandatory face value redemption obligations, the introduction of a statutory management mechanism, and crossovers with banking supervision, reflecting Hong Kong's prioritization of stability and fiat currency anchoring, rather than solely pursuing market growth or issuers.

3. The Distinction of RWA and Its Actual Impact: Compliance is the Cornerstone

A common misconception is that the compliance of stablecoins implies that RWA (Real World Asset tokenization) is also indirectly recognized. This is not the case. The regulation does not provide a direct pathway or legal recognition for RWA plans. Stablecoins operate within a fiat framework, while RWA involves bringing domestic assets (such as real estate, stocks, bonds) into token form. The regulation emphasizes that there are still regulatory gaps for RWA, with main challenges including cross-border asset transfers and QFII restrictions. Obtaining FRS approval does not equate to being legally allowed to engage in RWA business.

The new regulations will fundamentally change the way virtual asset companies operate in Hong Kong. Both issuers and investors must reassess their strategies, partners, and legal risks. Unlicensed issuance is no longer a "risk" but a criminal offense. Global platforms can no longer "incidentally" offer stablecoins in Hong Kong; they must establish dedicated Compliance strategies.

Conclusion:

The implementation of stablecoin regulatory policies in Hong Kong has brought a clear compliance framework and new development opportunities to the cryptocurrency market. The stablecoin regulations in the Hong Kong region are a strategic choice made intentionally: to incorporate crypto finance into a system of institutional accountability. By integrating licensing, regulation, and enforcement into a unified framework, Hong Kong sends a clear signal to the global market: digital finance must operate under the rule of law. Despite unresolved issues such as how to balance AML/CFT regulation while preserving anonymity features, and how mainland capital controls interact with the cross-border circulation of Hong Kong dollar stablecoins, the core proposition of Hong Kong is: the key to financial evolution lies not in speed, but in sovereignty, stability, and systemic integrity. Only through regulation can trust be established in places where technology cannot prove trust itself. Without trust, innovation will ultimately fail.