HSBC, ICBC Plan to Apply for Hong Kong Stablecoin Licenses
What HSBC and ICBC Are Planning
HSBC and the Industrial and Commercial Bank of China (ICBC), the world’s largest bank by total assets, are preparing to apply for stablecoin licenses in Hong Kong, according to a report in the Hong Kong Economic Journal. The applications would place both banks at the forefront of the city’s new regulatory regime for fiat-referenced digital assets, which came into effect on Aug. 1 with a six-month transition period.
The (HKMA) has indicated it will issue only a limited number of licenses initially. Standard Chartered and ICBC are reportedly favored to secure approval in the first round, giving them a first-mover advantage in an increasingly competitive market. Neither HSBC nor ICBC responded to media requests for comment.
Investor Takeaway
Why Hong Kong’s Stablecoin Rules Matter
Ordinance criminalizes the issuance or promotion of unlicensed fiat-referenced stablecoins to retail investors. The new framework sets a high compliance bar, with stringent requirements on reserve management, risk controls, and disclosures. According to local reports, some potential issuers described the rules as stricter than expected.
When the ordinance took effect, several stablecoin companies active in Hong Kong reported sharp losses, with some tokens falling as much as 20% in a single day. Analysts framed this as a healthy correction, reflecting a transition toward more regulated and institutionally trusted issuers.
What’s Next for Hong Kong’s Digital Asset Strategy?
The stablecoin framework is part of a broader push to establish Hong Kong as a global hub for regulated digital assets. Following the rollout, the Securities and Futures Commission (SFC) issued new , banning smart contracts in cold storage systems and mandating sweeping security standards. The SFC also warned of heightened fraud risks as , urging investors to remain cautious.
As of late August, 77 institutions had expressed interest in applying for a stablecoin license. If HSBC and ICBC secure approvals, it could trigger a wave of bank-led stablecoin initiatives, contrasting with the fintech-driven dominance viewn in other jurisdictions. For China, the involvement of ICBC aligns with a broader strategy of exploring yuan-backed digital assets while shaping regional policy around stablecoins.
Investor Takeaway
