Journalist
Hassan Shittu
Journalist
Hassan Shittu
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Shares of Bank of China Hong Kong unit jumped 6.7% on Monday, closing at HKD 37.58, after local reports revealed the state-owned lender is preparing to apply for a stablecoin issuer license under Hong Kong’s new regulatory framework.
The news has fueled speculation that one of China’s largest banks could soon issue a state-backed stablecoin, potentially positioning itself as a rival to the digital yuan.
According to the Hong Kong Economic Journal, Bank of China (Hong Kong) has already formed a dedicated task force to study stablecoin issuance. Market sources say the bank is actively preparing materials to become one of the first license applicants, following the Hong Kong Monetary Authority’s (HKMA) call for early submissions by the end of August.
The development comes just weeks after Hong Kong’s Stablecoin Bill came into force on August 1, establishing one of the world’s first dedicated licensing regimes for fiat-referenced stablecoins.
Under the new ordinance, any entity issuing fiat-pegged stablecoins in Hong Kong, or abroad if linked to the Hong Kong dollar, must obtain authorization from the HKMA.
Licensed issuers are required to maintain strict reserve asset management, segregate client funds, and guarantee redemption at par value.
The law also mandates anti-money laundering compliance, risk management protocols, disclosures, audits, and fit-and-proper checks for management teams.
The HKMA began accepting expressions of interest on August 1 and has set September 30 as the deadline for formal applications. Officials confirmed they have already received inquiries from more than 40 companies, even before the August 1 regulation took effect.
Major firms, including JD.com, Ant Group, Standard Chartered, and Circle, publicly stated application intentions, while law firms report managing consultations for additional candidates finalizing materials.
On August 8, Animoca Brands announced a joint venture with Standard Chartered Hong Kong and HKT to apply for the city’s first stablecoin license.
Hong Kong Positions as Regulated Stablecoin Hub Amid $261B Market Growth
The growing competition has drawn heavy investor interest. Hong Kong regulators have cautioned against market volatility, noting that announcements about licensing intentions have already triggered sharp stock movements.
On August 14, the HKMA and Securities and Futures Commission (SFC) issued a joint statement warning that expressions of interest do not guarantee approval. They stressed that licenses will only be granted to applicants that meet the framework’s high thresholds.
HKMA chief executive Eddie Yue said only a small number of licenses will be issued initially, underscoring the strict criteria. SFC CEO Julia Leung also warned investors against chasing short-term price moves, noting that misleading claims on social media had already influenced sentiment.
The ordinance’s rollout marks Hong Kong’s bid to position itself as a regulated hub for stablecoins at a time when global market capitalization in the sector has surged to a record $261 billion, after 22 consecutive months of growth.
Regulators hope that tighter rules will reduce systemic risks while attracting major financial institutions. Analysts say the framework could encourage non-USD stablecoin alternatives in Asia, potentially challenging the dollar’s dominance in regional settlements.
Bank of China’s interest is especially significant given Beijing’s ongoing rollout of the digital yuan, its central bank digital currency (CBDC). While the digital yuan remains under the direct control of the People’s Bank of China, a licensed Bank of China stablecoin could provide a commercial, internationally accessible counterpart within a regulated framework.
Some observers believe such a development could help China test the cross-border utility of a digital asset backed by state institutions.
The HKMA has said it will continue consultations on technical requirements and risk controls, and existing issuers are expected to transition into compliance over the coming months.
For now, the Authority has not granted any licenses, and investors are urged to verify any issuer’s credentials through official channels.
With Hong Kong pushing ahead, the stablecoin licensing race is intensifying across Asia.
Hong Kong Raises $1.5B in July as Stablecoin Ventures Attract Investor Capital
Hong Kong’s push into stablecoins is unfolding against a broader backdrop of regulatory tightening and investor enthusiasm across Asia.
The SFC, on August 15, unveiled new custody standards for virtual asset trading platforms, responding to a wave of global hacks that drained more than $3 billion from exchanges in the first half of 2025.
The circular sets minimum requirements for wallet infrastructure, transaction verification, and access controls as part of the regulator’s “ASPIRe” roadmap for digital asset security.
The urgency of the measures was underscored by a fresh breach at Turkish exchange BtcTurk on August 14, when attackers stole $48 million across seven blockchains in under four seconds, far faster than most exchange alert systems.
Despite security concerns, capital continues to pour into Hong Kong’s fast-evolving crypto sector. Publicly listed companies raised more than $1.5 billion in July to fund ventures tied to stablecoins, blockchain, and payment networks, according to exchange filings.
OSL alone secured $300 million in a fast-tracked share placement, with backing from sovereign wealth and hedge funds.
Notably, a dedicated index of stablecoin-related stocks has surged 65% this year, far outpacing the Hang Seng.
The regulatory push is unfolding against a regional backdrop of rapid developments. Japan is preparing to approve its first yen-pegged stablecoin this autumn, while China is weighing the launch of yuan-backed tokens to expand the currency’s global footprint.
With Goldman Sachs forecasting trillions in new flows into stablecoins, the sector’s transformation is only accelerating, and Hong Kong is positioning itself at the center.
