HSBC and ICBC Lead Charge for Stablecoin Licenses in Hong Kong

Hong Kong’s crypto market is heating up, with 77 institutions vying for stablecoin licenses. However, the Hong Kong Monetary Authority (HKMA) has signaled that only a few select institutions will be approved, sparking intense interest among major players. Industry giants like the Industrial and Commercial Bank of China (ICBC) and Bank of China (HSBC) are leading the charge.

ICBC and HSBC Lead Hong Kong Stablecoin Licenses

According to a recent report , Hong Kong's HKMA announced that it will approve only a limited number of stablecoin licenses, with ICBC and HSBC among the key players at the forefront.

As of August, about 77 institutions have applied for stablecoin licenses. The platforms include banks, e-commerce platforms, tech firms, Web3 startups, payment companies, and asset managers.

Showing much support for the HKMA’s stringent approach, lawmakers posit that the crypto regulation is intentionally rigorous. Legislative Council member Ng Kit-chong stated, “'The number of licenses to be issued will be very small.” He added that “possibly one license” will be approved by next year. Additionally, lawmakers are working on legislation for offline over-the-counter (OTC) crypto transactions, expected to be rolled out in 2025.

Notably, the authority has set a September deadline for serious applicants to submit full proposals for the stablecoin licenses. However, they cautioned that interest or application submissions don't guarantee approval - only actual licensing will.

“The regime will filter out those unable to align with the strict regulations, produce viable use cases and demonstrate financial stability,” Cora Ang, legal head at Amina Group, noted. She emphasized that only prepared applicants would be considered, adding that regulators were taking a cautious approach in the wake of incidents like FTX. They were keen to avoid any perception that their regulatory regime was inadequate, as it posed a reputational risk

Meanwhile, the public has been warned to be wary of advertisements or promotions for unlicensed stablecoins, as they lack legal recognition and protection. On August 1, the region’s Stablecoin Ordinance took effect, making it illegal to offer or promote unlicensed stable tokens.

Crypto Reserves: An Inevitable Trend

Interestingly, Ng Kit-chong has also shed light on the “inevitable trend” of crypto and Bitcoin reserves. Countries across the world are embracing Bitcoin and other cryptocurrencies to be added to their national reserves.

In December 2024, the region proposed a Bitcoin reserve despite mainland China’s restrictive crypto stance. The authority has been advocating for leveraging the 'one country, two systems' policy to embrace a Strategic Bitcoin Reserve. In addition, the city intends to become a trusted Bitcoin liquidity hub .