Nikolas Sargeant
Hong Kong is preparing to issue its first batch of stablecoin issuer licenses in the first quarter of 2026, accelerating efforts to position itself as a regional digital asset hub amid intensifying global competition for cryptocurrency business.
Speaking at the World Economic Forum in Davos, Hong Kong Financial Secretary Paul Chan stated the city's approach to cryptocurrency regulation remains "responsible and sustainable," according to the South China Morning Post. Chan confirmed the initial round of stablecoin licenses is expected to be granted in the coming months.
Chan characterized stablecoins as part of a broader initiative to build a comprehensive digital asset ecosystem in Hong Kong, spanning regulated stablecoin issuance, licensed trading platforms, and tokenized financial products. He described digital finance as a strategic growth pillar as the city seeks to maintain its status as a global financial center.
The stablecoin licensing regime, passed in 2025, establishes strict requirements for fiat-referenced stablecoin issuers. These include rules governing reserve backing, redemption rights, governance structures, and risk management protocols, reflecting regulators' focus on financial stability and consumer protection following volatility in global cryptocurrency markets.
Hong Kong's stablecoin framework operates alongside an already active licensing system for cryptocurrency trading platforms. Under rules enforced by the Securities and Futures Commission, 11 virtual asset trading platforms have received licenses to date. Approved operators include OSL, HashKey, and Bullish, according to the regulator's public disclosures.
Beyond trading and stablecoins, Hong Kong is advancing tokenization initiatives. In November 2025, the Hong Kong Monetary Authority launched a pilot under Project Ensemble to test real-value transactions using tokenized deposits and digital assets, involving major banks and asset managers in experimental settlement infrastructure.
Regulators are simultaneously consulting on additional proposals introducing new licensing regimes for cryptocurrency asset dealing, advisory, and management services. The expanded framework would bring a wider range of digital asset activities under formal supervision.
Earlier this week, the Hong Kong Securities and Futures Professionals Association warned that tighter virtual asset management rules could deter traditional asset managers by raising compliance costs and slowing institutional participation. The industry group's concerns highlight tension between expanding digital asset markets and maintaining accessibility for traditional financial institutions.
In a submission to the Securities and Futures Commission, the Hong Kong Securities and Futures Professionals Association argued against removing the long-standing "de minimis" exemption for Type 9 licensed managers, which currently allows limited cryptocurrency exposure without triggering a separate virtual asset management license requirement.
The proposal emerges as Hong Kong broadens its digital asset framework, with authorities consulting on new licensing regimes for virtual asset dealing, advisory, and management services. The regulatory expansion aims to create comprehensive oversight while potentially increasing operational complexity for firms seeking to incorporate digital assets into traditional portfolios.
