On September 8, 2025, the latest developments regarding the Hong Kong Monetary Authority (HKMA) stablecoin license applications have drawn global attention: as of the end of August, 77 institutions have expressed their intention to apply, with traditional financial giants such as ICBC Asia and HSBC also clearly stating their applications. Previously, Bank of China Hong Kong and Standard Chartered Bank were considered strong contenders for the first batch of licenses. This series of actions not only highlights Hong Kong's leading position in the global digital asset field but also, according to Bloomberg, may signal a significant shift in China's cryptocurrency regulation, as a global monetary sovereignty game surrounding stablecoins quietly begins.
The HKMA initially plans to issue only a few stablecoin licenses in the first phase, but as of the end of August, as many as 77 institutions have expressed their intention to apply, making the competition exceptionally fierce. Among them, the active participation of traditional financial institutions is particularly noteworthy:
Chinese Banks: Following Bank of China Hong Kong, ICBC (Asia) has also submitted an application to the HKMA, becoming another major Chinese bank to clearly state its application. This indicates that China's state-owned banking system is actively exploring compliant pathways in the digital asset field through Hong Kong as a "testing ground."
International Banks: HSBC has also stated its intention to apply for a stablecoin license, competing alongside international giants like Standard Chartered Bank. The entry of these global banks not only brings substantial financial and technical strength but also indicates that the status of stablecoins in the global financial system will increasingly rise.
Hong Kong has become a "hotcake" for stablecoin licenses due to its prudent and open regulatory framework. In recent years, the Hong Kong SAR government has actively embraced the virtual asset and Web3 industries, aiming to consolidate its position as an international financial center. The passage of the "Stablecoin Ordinance" and the promotion of sandbox pilots have made Hong Kong the first jurisdiction in the world to establish a comprehensive regulatory framework for fiat currency stablecoins. This "pilot first, legislate later" model strikes a balance between encouraging financial innovation and maintaining financial stability, attracting global attention.
Bloomberg comments that since the birth of Bitcoin in 2009, China's regulation of cryptocurrencies has shown a "four-year tightening cycle." From ordering payment providers to cancel services to Bitcoin institutions in 2013, to banning ICOs and shutting down exchanges in 2017, and then declaring all cryptocurrency trading illegal in 2021, the regulatory stance has been consistently tough.
However, Bloomberg believes that this month marks the fourth anniversary of the last large-scale tightening policy, and the next steps are expected to involve a change in strategy, relaxing relevant policies. The reason lies in the U.S. dollar, or more accurately, the anticipated surge of stablecoins pegged to the dollar.
The Threat of Dollar Stablecoins: Today, the U.S. has granted regulatory approval to these 1:1 replicas of fiat currencies, and the market size of stablecoins, valued at $5.7 trillion, is expected to double. As trading volumes expand and more digital dollars are minted, they will challenge the monetary sovereignty of other regions in the world. As a bridge between traditional currencies and speculative cryptocurrency investments, they are essentially harmless. However, as a mainstream medium of exchange, they will permeate regular transactions.
Adverse Effects on China: However, some economies wish to reduce their dependence on the dollar in the 21st century. Simply imposing bans may not effectively counter the impact of U.S. stablecoins. To gain a competitive advantage in this field, it is time to actively participate in this game—Hong Kong provides an important opportunity for this. Hong Kong is both a global financial center and an important testing ground for digital asset innovation. China hopes to reduce its dependence on the dollar in the 21st century. Simply imposing bans may not effectively counter the impact of U.S. stablecoins. To gain a competitive advantage in this field, it is time to actively participate in this game—Hong Kong provides an important opportunity for this. Hong Kong is both a global financial center and an important testing ground for digital asset innovation.
Hong Kong's Strategic Role: Hong Kong is preparing to issue Hong Kong dollar stablecoin licenses. However, Bloomberg believes that in the future, Hong Kong may also launch a regulated digital currency in renminbi, or at least its offshore renminbi (CNH) stablecoin. There are already enough influential voices in China discussing this possibility. The utility of these currencies may lie in geopolitics. The tariff war initiated by the Trump administration has made it more urgent for China to seek its own sphere of influence. President Xi Jinping's enthusiastic meetings in Tianjin with Russian President Vladimir Putin and Indian Prime Minister Narendra Modi, as well as the upcoming call among BRICS leaders hosted by Brazilian President Lula da Silva, provide opportunities for China to build new trade and payment alliances.
Private Sector-Led Stablecoins: It is widely believed that the digital version of official currency—the digital renminbi—will complement other government-supported initiatives, such as the renminbi cross-border payment system (CIPS). However, even in the domestic market, the digital renminbi has not yet truly gained popularity. In terms of cross-border payments, relevant authorities seem to be shifting their focus to stablecoins led by the private sector issued in Hong Kong, with affiliated companies of JD Group and Alibaba Group Holding Limited's Ant Group actively promoting the launch of such stablecoins.
Compliance and Risks: But will the relevant regulatory authorities be willing to support such projects? Currently, more than three-fifths of cryptocurrency illegal activities are conducted through stablecoins. The digital twin of offshore renminbi transferring from one anonymous wallet to another on a public chain also poses the same risks. For this reason, Hong Kong requires issuing institutions (or Hong Kong-licensed cryptocurrency exchanges) to verify the identity of token holders each time stablecoins are issued, redeemed, or traded, at least in the initial phase. For the omnipotent cryptocurrency world, this is a rather cumbersome restriction. However, from a regulatory perspective, it is a crucial safeguard. Regulators do not want brokers to excessively promote stablecoins to mainland audiences. They prefer steady growth rather than speculative frenzy.
As Liu Zongyuan, a scholar at the Council on Foreign Relations, stated: "By allowing offshore renminbi-based stablecoin pilots in Hong Kong, China can explore the circulation of tokenized renminbi overseas while maintaining the integrity of capital controls on the mainland." Offshore renminbi stablecoins will not make the renminbi the global preferred reserve currency, but the goal is to maintain relevance as the combative White House attempts to weaponize its control over global financial flows. China's current attitude towards cryptocurrencies has adjusted compared to the past, but it has never abandoned blockchain technology. Now is the time to let this trust in technology pay off—by laying out a strategy in the stablecoin field.
The competition for Hong Kong stablecoin licenses among traditional financial giants like ICBC Asia and HSBC, along with Bloomberg's interpretation that China may launch a currency sovereignty defense battle through stablecoins, paints a picture of the accelerated reshaping of the global financial landscape. As a bridge between China and the world, Hong Kong is becoming an important testing ground in the digital currency field. The launch of Hong Kong dollar stablecoins, along with the potential emergence of offshore renminbi stablecoins, will not only enhance Hong Kong's competitiveness as an international financial center but may also become a key step for China to seek breakthroughs in the global monetary system and respond to the challenges of dollar hegemony. This financial transformation triggered by stablecoins is changing the future of global finance at an unprecedented speed and depth.
Related: JD Stablecoin Ten Thousand Word Report: Can It Restructure Cross-Border Payments and Ignite a Trillion-Level Digital Financial New Blue Ocean?
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