Global Banks Eye Hong Kong’s Stablecoin Licenses Amid Regulatory Shake-Up

As the world watches, Hong Kong has taken a bold step in the digital currency landscape with its new policy on stablecoin issuers. Effective from August 1, 2025, the Guideline on Supervision of Licensed Stablecoin Issuers establishes stringent criteria for institutions wishing to issue or promote stablecoins tied to fiat currencies. This move aims to bring a more structured and secure approach to digital finance, resonating throughout global financial markets.

The Impact of Hong Kong’s New Stablecoin Regulations

The enforcement of these guidelines signals a seismic shift for stablecoin operators in Hong Kong, with a notable 20% drop in stock and token prices for many local firms following the announcement. This swift market correction underscores the weight of the new regulations, which industry experts view as a necessary recalibration to enhance market integrity. By imposing robust capital, reserve, and risk management standards, Hong Kong is positioning itself as a bastion of financial stability in the crypto arena.

This regulatory overhaul includes a six-month transition period and has caught the attention of major financial players. Notably, HSBC and the Industrial and Commercial Bank of China (ICBC) are reported to be among the frontrunners applying for a stablecoin license, hoping to leverage early entry advantages.

Hong Kong Extends Regulatory Framework to Crypto Custody

In tandem with the stablecoin guidelines, the Securities and Futures Commission of Hong Kong (SFC) has rolled out new requirements for crypto asset custody. Aimed at bolstering asset protection, these rules prohibit cold wallets from employing smart contracts and demand heightened security standards. The updated regulatory landscape attracted 77 applicants as of August’s end, yet only a handful may succeed due to the stringent conditions set forth by the SFC.

Furthermore, the global financial institution Standard Chartered is cited as being among the most likely to secure such licenses, potentially setting a precedent for the involvement of traditional banks in a domain traditionally dominated by fintech innovators.

HSBC and ICBC Among Announced Contenders

Amidst this regulatory evolution, HSBC and ICBC have thrown their hats into the ring. While they have yet to comment on these endeavors, sources suggest these banks, alongside Standard Chartered, are well-positioned to secure initial license approvals, marking a potential paradigm shift in stablecoin issuance from fintech upstarts to established banking giants.

For China, ICBC’s anticipated engagement in stablecoin issuance aligns with its broader strategy of expanding digital asset frameworks backed by its native currency, the Renminbi. This approach not only reinforces domestic digital economic policies but could also influence regional stablecoin policy landscapes.

As the dust settles, the SFC remains vigilant, warning against speculative trading and investment scams spurred by market volatility, urging investors to maintain composure and not be swayed by transient market fervors.

In essence, Hong Kong’s daring regulatory overhaul may not only redefine its role in the digital financial arena but also catalyze a wave of global interest as the city emerges as a pivotal hub in the stablecoin economy.