HSBC and Standard Chartered Lead Hong Kong’s Stablecoin Push as Wider Reforms Take Shape

HSBC and a Standard Chartered-led joint venture are positioned to be among the first recipients of Hong Kong licences under the city’s new stablecoin regulatory framework

As reported by South China Morning Post, the Hong Kong Monetary Authority (HKMA) is expected to announce the inaugural batch as early as March 24, 2026, following a review of 36 applications submitted since the Stablecoins Ordinance took effect on August 1, 2025. Local crypto exchange OSL may also be included. The HKMA has confirmed it plans to approve a “very small number” of issuers by end of March.

What the License Actually Demands

The Stablecoins Ordinance, passed in May 2024, sets a deliberately high bar. Applicants must hold minimum paid-up share capital of HK$25 million. Stablecoins must be backed 100% by high-quality liquid assets – cash, treasury bills – held in a segregated trust by a qualified custodian. Issuers cannot pay interest to holders, must guarantee par-value redemption within one business day, and must comply with Hong Kong’s zero-threshold Travel Rule, requiring identity data on every transfer regardless of amount.

This stands apart from how tokenized deposits are treated. The HKMA classifies those as commercial bank money under the Banking Ordinance – fractional reserve, on-balance sheet, interest-bearing, and typically restricted to permissioned networks. Only licensed banks can issue them.

Stablecoin licenses, by contrast, are open to banks and non-banks alike. They are designed for circulation on public blockchains and positioned as payment instruments for Web3 ecosystems and cross-border settlement – not as a modernization of existing banking rails, but as an alternative to them.

Two Banks, Two Strategies

HSBC’s inclusion drew some surprise – the bank skipped the HKMA’s stablecoin sandbox, having concentrated its blockchain work on tokenized deposits. Its pivot signals a strategic expansion.

HSBC has built substantial infrastructure through its Orion platform, facilitating over US$3.5 billion in digitally native bonds, including government green bonds. Its existing Tokenised Deposit Service handles near-instant corporate HKD and USD transfers, and the bank has demonstrated real-time cross-border settlement with Ant International between Hong Kong and Singapore. It is also developing AI-driven treasury systems for autonomous cash flow management.

Standard Chartered is pursuing broader distribution. Its joint venture with Animoca Brands and HKT – Hong Kong’s dominant telecom operator – targets retail merchant payment integration from the start. Its affiliate Zodia Markets already processes roughly US$50–60 million daily in stablecoin-based OTC foreign exchange settlement for Asian institutions. The bank has framed the Hong Kong operation as a blueprint for expansion into other markets.

Why It Matters

Institutional entry at this level carries weight beyond the licenses themselves. Analysts have noted that bank-backed stablecoins bring credibility that unregulated alternatives like USDT or USDC have not achieved in conventional financial circles. More practically, stablecoins are expected to compress cross-border trade settlement from days to minutes and give corporate treasury teams real-time liquidity tools current banking infrastructure cannot match.

Global stablecoin market capitalization crossed $300 billion in early 2026, with some projections reaching $2 trillion by 2028 – contingent largely on how quickly major financial centers establish workable regulatory frameworks. Hong Kong is positioning itself as a compliant corridor for Chinese capital to move internationally on-chain, competing directly against Singapore and the EU for institutional digital asset business.

The Broader Build-Out

The stablecoin regime is one layer of a much larger framework Hong Kong is assembling under its “ASPIRe” digital asset roadmap.

Draft legislation expected in 2026 will introduce formal licensing for virtual asset dealing, custody, and advisory services. The previous 10% de minimis exemption has been scrapped – even minor crypto allocations now require a license. Proposed capital minimums are HK$5 million for dealing and advisory, HK$10 million for standalone custody.

Additionally, on March 2, 2026, the HKMA signed a Memorandum of Understanding with Shanghai’s Data Bureau and the National Technology Innovation Center for Blockchain to develop a shared blockchain platform for cross-border cargo trade and finance. The initiative will connect trade data, electronic bills of lading, and financing tools, with a focus on integrating mainland China’s cargo data with international financial systems through Hong Kong.

At the wholesale level, Project Ensemble is running live interbank pilots through 2026 involving HSBC, Standard Chartered, Bank of China, Ant International, and BlackRock. In late 2025, HSBC completed the first real-value transfer under the framework – HK$3.8 million in tokenized deposits processed for a client.

The HKMA has also pivoted its e-HKD CBDC focus from retail to wholesale and international trade settlement. The government has already issued HK$10 billion in digital green bonds – the first globally to integrate tokenized central bank money into settlement. On the tax side, recent budget proposals move to classify digital assets as qualifying investments for single-family offices, with OECD Crypto-Asset Reporting Framework implementation targeted for the first half of 2026.

A Market Taking Shape

What is being built in Hong Kong is a deliberate institutional architecture – not a permissive sandbox, but a regulated market with capital requirements, custodial standards, and accountability at every layer. Licensing HSBC and Standard Chartered first is a statement about what kind of participants the HKMA wants anchoring the system.

Whether the pace holds against competing jurisdictions remains to be seen. But the direction is clear, and the first licenses will set the tone for everything that follows.

The information provided in this article is for educational purposes only and does not constitute financial, investment, or trading advice. Coindoo.com does not endorse or recommend any specific investment strategy or cryptocurrency. Always conduct your own research and consult with a licensed financial advisor before making any investment decisions.

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