Major banks move to secure early entry under strict new framework
HSBC and the Industrial and Commercial Bank of China (ICBC) — the world’s largest bank by total assets — reportedly plan to apply for Hong Kong stablecoin licenses, according to the Hong Kong Economic Journal.
The move comes after the Hong Kong Monetary Authority (HKMA) introduced a new stablecoin regulatory regime on Aug. 1, 2025, designed to tighten oversight and protect investors.
While 77 institutions expressed interest in applying for licenses by the end of August, ICBC and Standard Chartered are expected to be among the first to secure approvals. This first-mover advantage could allow them to shape the city’s rapidly evolving stablecoin ecosystem.
HSBC is also preparing its application, though the bank has yet to confirm details publicly.
Stringent requirements under the Stablecoin Ordinance
The Stablecoin Ordinance imposes some of the strictest rules globally:
- Criminalizes the offering or promotion of unlicensed fiat-referenced stablecoins to retail investors.
- Enforces a high bar of entry for issuers, requiring transparency, reserve audits, and regulatory approval.
- Triggered immediate double-digit losses for some firms when the rules took effect, with prices dropping as much as 20% in a single day.
Despite initial shocks, experts view the stricter framework as a healthy correction for Hong Kong’s digital asset market.
Broader crypto regulatory shift in Hong Kong
Following the stablecoin rollout, the Hong Kong Securities and Futures Commission (SFC) introduced new crypto custody standards in mid-August. These include:
- Sweeping security requirements for licensed custodians.
- A ban on smart contracts in cold wallets, reflecting regulators’ cautious stance.
The SFC also issued warnings that the hype surrounding stablecoin regulations has created opportunities for fraud, urging investors to remain vigilant.
Hong Kong’s stablecoin licensing regime marks a major milestone in Asia’s crypto regulation. If HSBC and ICBC secure licenses, it could legitimize stablecoin adoption at scale and give traditional banks a leading role in shaping the next wave of regulated digital finance.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.