TL;DR
- The Hong Kong Monetary Authority will begin granting licenses to stablecoin issuers starting in March, with the first round limited to a very small number of approvals.
- The HKMA framework evaluates risk management, AML controls, and the quality of reserve assets, under criteria focused on solvency and financial traceability.
- The stablecoin market is valued at around $300 billion and processed nearly $35 trillion over the past year.
The Hong Kong Monetary Authority will begin issuing licenses to stablecoin issuers from March, as confirmed by Eddie Yue Wai-man during a Legislative Council session. The regulator indicated that the first round will include only a very limited number of approvals, as the evaluation process enters its final phase.
The licensing framework targets stablecoin issuers that operate or seek to operate within Hong Kong’s jurisdiction. The HKMA established review criteria focused on risk management, anti-money laundering controls, and the quality of the assets backing each stablecoin. Applications are assessed under parameters designed to ensure operational solvency and the traceability of financial flows.
The Stablecoin Market Is Valued at Around $300 Billion
Yue stated that issuers that obtain a license will also be required to comply with local rules applicable to cross-border operations. The regulator noted that, once the framework is implemented, Hong Kong could explore mutual recognition arrangements with other jurisdictions, although no timelines or specific countries were disclosed.
The stablecoin market continues to expand rapidly. Its current value stands at around $300 billion. Over the past year, these instruments processed approximately $35 trillion through blockchain infrastructures, according to data cited by authorities and financial institutions.
Citi projections estimate that the stablecoin market could reach a size of between $1.9 trillion and $4 trillion in the coming years. Separately, executives at major international banks stated that the development of tokenized money and stablecoins can be integrated into digital trade settlement systems.
Hong Kong Did Not Specify How Many Licenses It Will Grant
The licensing plan is part of Hong Kong’s strategy to establish a formal regulatory framework for digital assets. Unlike mass authorization models, the HKMA opted for an initially restrictive approach, maintaining direct oversight of the first issuers to receive approval.
So far, Hong Kong has not disclosed the identities of the applicants or the exact number of licenses to be issued in March. It also did not clarify whether the initial cap will be expanded in later stages, once the operational performance of authorized issuers is assessed
