The Hong Kong Monetary Authority is expected to grant its first stablecoin issuer licenses to HSBC, Standard Chartered, and crypto exchange OSL as early as March 24, according to the South China Morning Post and Bloomberg. The three were selected from 36 formal applicants under the Stablecoins Ordinance, which took effect in August 2025 and made it illegal to offer unlicensed fiat-referenced stablecoins to retail investors in the city.
The First Batch Is Deliberately Small
Hong Kong Financial Secretary Paul Chan confirmed in February that the HKMA would issue "only a small number" of licenses initially. The regulator has repeatedly signaled that the first batch would be tightly controlled, narrowing the pool from 36 applicants to three or four.
The selection logic is straightforward: the HKMA prioritized institutions already authorized to issue banknotes in Hong Kong. Only three banks hold that privilege: HSBC, Standard Chartered, and Bank of China. Two of the three are now in the first license batch. The regulator views well-capitalized banks as both safer issuers and more effective drivers of mainstream adoption.
OSL, the crypto exchange arm of BC Technology Group, is the only non-bank in the reported first batch. Its inclusion signals that the HKMA is willing to license native crypto firms alongside traditional banks, provided they meet the same reserve and compliance standards.
Reserve Rules That Set Hong Kong Apart
Hong Kong's framework is one of the strictest globally for stablecoin reserves. Issuers must back tokens exclusively with High Quality Liquid Assets, the same category of ultra-safe, short-term holdings that central banks require for bank liquidity buffers. The rules also mandate:
- T+1 par redemptions: holders can redeem at face value within one business day
- Client asset segregation: issuer funds and customer funds cannot be commingled
- AML/CFT controls: full anti-money laundering and counter-terrorism financing compliance
- Public reserve disclosures: regular, auditable reports on what backs each token
This is stricter than the EU's MiCA framework, which allows a broader range of reserve assets including bank deposits. It is also stricter than the US GENIUS Act, which permits a wider set of "high-quality liquid assets" including certain government-backed securities.
Standard Chartered Already Has a JV Ready
Standard Chartered is not entering this cold. Its Hong Kong unit formed a joint venture with Animoca Brands, the Web3 gaming and investment firm, and HKT, Hong Kong's largest telecommunications company, specifically to apply for a Hong Kong dollar-backed stablecoin license. The JV participated in the HKMA's stablecoin sandbox program in 2024, giving it a head start on compliance and technical integration.
HSBC has not publicly disclosed a similar partnership or the currency denomination of its planned stablecoin. Both banks declined to comment on the reports. The HKMA stated it "does not comment on market rumours."
A $300 Billion Market With Room to Grow
The broader stablecoin market now stands at roughly $300 billion, as of March 13, 2026. Citi projects it could grow to between $1.9 trillion and $4 trillion. Hong Kong is positioning itself to capture a share of that growth through regulated, bank-issued tokens rather than relying on offshore issuers like Tether.
The timing coincides with a global rush by traditional banks into stablecoins. In the US, Wells Fargo filed a trademark for WFUSD, and Florida passed the first state-level stablecoin bill 37-0. In Singapore, Alibaba backed a stablecoin platform processing $10 billion annually. Hong Kong's approach differs by putting existing banknote issuers at the front of the line, a signal that the HKMA wants stablecoin issuance to look like an extension of the existing monetary system rather than a disruption of it.
For crypto card users in Hong Kong and across Asia, bank-issued stablecoins could eventually reduce the friction of loading cards with fiat-pegged tokens. If HSBC or Standard Chartered issue HKD-pegged stablecoins that integrate with existing banking rails, the gap between a traditional bank account and a crypto card balance narrows considerably.
What Remains Unknown
The HKMA has not confirmed the reports, and the "number of licenses and timetable had yet to be finalized and remained subject to change." The currency denomination of each bank's planned stablecoin, the technical infrastructure (public chain vs. private ledger), and the retail availability timeline are all still undisclosed.
Industrial and Commercial Bank of China is among the 36 applicants but was not named in the first batch. Whether China's largest bank receives a license in a subsequent round will be a significant signal about Beijing's tolerance for Hong Kong's crypto ambitions.
Overview
Hong Kong is expected to grant its first stablecoin licenses to HSBC, Standard Chartered, and OSL as early as March 24, 2026. The three were chosen from 36 applicants under the Stablecoins Ordinance. Reserves must be backed by High Quality Liquid Assets with T+1 redemption, making this one of the strictest stablecoin frameworks globally. Standard Chartered has a joint venture with Animoca Brands and HKT ready to issue an HKD-backed token. The move puts Hong Kong's existing banknote issuers at the center of the city's stablecoin strategy.
