Hong Kong Issues First Stablecoin Licenses to HSBC and RD Technologies

The Hong Kong Monetary Authority (HKMA) stated that, based on the licensees' business plans, they will commence operations in the coming months after completing relevant preparatory work. HKMA Chief Executive Eddie Yue said that the issuance of stablecoin issuer licenses is an important milestone in Hong Kong's digital asset development. He expressed anticipation for the issuers to begin operations as planned, actively explore development opportunities while managing risks, promote the application of compliant stablecoins, address pain points in financial and economic activities, create value for citizens and businesses, and foster the healthy development of digital assets in Hong Kong. The Hong Kong government proposed developing stablecoins many years ago. Last May, the Legislative Council passed the stablecoin ordinance bill, which included a licensing regime for stablecoin issuers, and the relevant ordinance took effect on August 1 of the same year. Media previously reported that as of last September, the HKMA had received 36 stablecoin license applications from institutions including banks, technology companies, securities or asset management and investment firms, e-commerce companies, payment institutions, and startups. The report noted that Hong Kong and the United States are currently the regions and countries globally that have passed stablecoin development legislation, leading to much speculation about their objectives. Beijing's attitude towards the Hong Kong government's stablecoin development has also become a focal point. Some analysts previously suggested that Beijing's interest in Hong Kong's stablecoin development was growing, and stablecoins would be the next main battlefield in the Sino-US currency war. However, Hong Kong media reported last year that Beijing's policy direction on stablecoins and cryptocurrencies had changed, and several central state-owned enterprises and Chinese banks' Hong Kong branches might temporarily not apply for stablecoin operating licenses; these reports were subsequently removed. In July last year, Hong Kong Secretary for Financial Services and the Treasury Christopher Hui told media that the primary starting point for Hong Kong's stablecoin development was to address pain points in cross-border payments within the real economy. For example, in regions or countries with higher local currency risks, using stablecoins as a cross-border payment tool could improve capital flow efficiency and save transaction costs. (Edited by Yang Sheng-ju) 1150410