Hong Kong stablecoin license first quarter rush! 11 exchanges approved as Asian financial center competes for dominance

Hong Kong Financial Secretary Paul Chan Mo-po stated in Davos that licenses have been issued to 11 trading platforms, and the first batch of stablecoin licenses will be granted in the first quarter. Hong Kong adopts the principle of “same activity, same risk, same regulation,” having issued $2.1 billion in tokenized green bonds and launched a regulatory sandbox. The “Stablecoin Ordinance” came into effect in August last year, imposing strict standards.

Hong Kong’s Stablecoin Licensing First Quarter Regulatory Framework Leading Globally

Hong Kong Financial Secretary Paul Chan Mo-po said that, as an international financial center, Hong Kong is taking an active and cautious approach to developing digital assets. To date, licenses have been issued to 11 virtual asset trading platforms, with the first batch of stablecoin licenses expected to be issued in the first quarter of this year. According to a report by South China Morning Post, Chan Mo-po stated on January 20 during the World Economic Forum in Davos, Switzerland, that Hong Kong will promote responsible and sustainable growth of the cryptocurrency market based on the principles of “same activity, same risk, same regulation.”

Hong Kong’s stablecoin regulatory system is regarded as a core pillar of its overall strategy. The Hong Kong Stablecoin Ordinance officially came into force last August, clearly requiring stablecoin issuers to meet strict standards, including reserve asset management, maintaining sound value stability mechanisms, and a series of anti-money laundering, counter-terrorism financing, risk management, disclosure, and audit requirements.

This regulatory framework is leading on a global scale. In comparison, U.S. stablecoin regulation is still in legislative discussion, and the EU’s MiCA, while already implemented, is relatively lenient. Hong Kong’s Stablecoin Ordinance clarifies issuance eligibility, reserve requirements, and operational standards, providing a clear compliance pathway for the stablecoin market. This regulatory certainty is especially important for institutional investors and large enterprises, as they need to ensure compliance before participating at scale.

The issuance of the first batch of stablecoin licenses will be a significant milestone in Hong Kong’s crypto industry development. Licensees will be able to legally issue and operate stablecoins in Hong Kong, which can be used for payments, cross-border remittances, DeFi applications, and more. More importantly, licensed stablecoins will gain recognition from Hong Kong regulators, paving the way for their integration into the traditional financial system.

Hong Kong Has Issued 11 Exchange Licenses to Build a Complete Ecosystem

Hong Kong has issued licenses to 11 virtual asset trading platforms, allowing licensed exchanges to legally provide cryptocurrency trading services to retail and institutional clients. This is a notable difference from many jurisdictions that only permit professional investors to trade.

The presence of these 11 licensed exchanges provides a complete infrastructure for Hong Kong’s crypto ecosystem. Investors can trade in a regulated environment without worrying about exchange insolvencies or asset security issues. Licensed exchanges are also required to comply with strict anti-money laundering and KYC standards, enhancing overall market compliance.

Additionally, Hong Kong is actively promoting tokenization development, including issuing three batches of tokenized green bonds totaling approximately $2.1 billion, and launching a regulatory sandbox to encourage innovative applications. Tokenized green bonds are traditional bonds issued on the blockchain in token form, offering multiple advantages: reducing issuance costs, increasing trading efficiency, enhancing transparency, and enabling small investors to participate in the bond market.

The $2.1 billion scale positions Hong Kong as a leader in the global tokenized bond market. These successful cases serve as models for tokenizing other traditional financial products, with future expansion into stocks, real estate, commodities, and more asset classes. The regulatory sandbox provides a testing ground for innovative companies, allowing them to trial new products and services in a controlled environment, reducing compliance costs.

Hong Kong Positions Digital Finance as a Core Growth Strategy

Chan Mo-po mentioned that finance and technology can mutually promote each other. Taking digital assets as an example, this financial innovation not only enhances transparency, efficiency, inclusiveness, and risk management of financial services but also more effectively channels capital into the real economy. Furthermore, finance is a key driver and enabler of technological development. Chan Mo-po stated that Hong Kong aims to build an integrated ecosystem covering stablecoins, exchanges, and tokenized assets.

In the face of increasing global competition, Hong Kong positions digital finance as a key pillar of its growth strategy. This strategic positioning shows that Hong Kong is not passively accepting the crypto industry but actively making it a core driver of economic transformation and upgrading. Compared to competitors like Singapore and Dubai, Hong Kong’s advantages lie in its strong traditional financial foundation, connections with Mainland China, and a comprehensive legal system.

Hong Kong’s stablecoin licensing regime may attract various applicants: global stablecoin issuers like Circle (USDC) and Tether (USDT) may apply for licenses to enter the Hong Kong market; local financial institutions such as banks and payment companies may launch Hong Kong dollar stablecoins; and emerging stablecoin projects focused on the Asian market.