Bank of China Hong Kong Branch applies for stablecoin issuance license

Bank of China (Hong Kong) Limited (BOCHK) has officially announced its intention to apply for a stablecoin issuance license, aiming to become one of the first approved institutions. This move marks an acceleration of Chinese financial institutions entering the digital asset market and further strengthens Hong Kong’s status as a global financial center. The Hong Kong Monetary Authority (HKMA) launched the “Stablecoin Regulation” on August 1, requiring all fiat-referenced stablecoin (FRS) issuers to obtain a license, with the first application deadline set for September 30. As of now, HKMA has not issued any licenses, but the market expects the first batch to be granted in early 2026.

BOCHK’s application plan stems from its strategic layout in Hong Kong’s emerging digital finance ecosystem. As one of Hong Kong’s three note-issuing banks (the other two being HSBC and Standard Chartered), BOCHK boasts robust financial infrastructure and a vast customer base, with total assets exceeding HK$3 trillion. This move not only reflects the positive embrace of blockchain technology by Chinese state-owned banks but may also promote the application of stablecoins in cross-border payments, supply chain finance, and digital asset settlement. According to analysis by the CoinCu research team, such regulatory measures are expected to enhance financial transparency and stability, similar to the significant increase in crypto asset trading volume following the issuance of virtual asset trading platform licenses in Hong Kong.

Accelerated Implementation of Regulatory Framework: From Legislation to Sandbox Testing

The regulatory process for stablecoins in Hong Kong has been progressing rapidly. On May 21, 2025, the Hong Kong Legislative Council passed the “Stablecoin Bill,” which was gazetted on June 6, officially establishing a licensing regime for FRS issuers. The regulation took effect on August 1, aiming to prevent systemic risks and protect investors and public interests through strict reserve asset management, redemption mechanisms, and risk controls. The HKMA emphasizes that stablecoin issuers must ensure full backing and high liquidity of reserve assets and are prohibited from paying interest or similar returns to avoid overlap with traditional deposit products.

To foster innovation, the HKMA launched a stablecoin issuer “sandbox” program as early as March 2024. As of May 2025, the first batch of participants includes JINGDONG Coinlink Technology Hong Kong Limited (JINGDONG Coinlink), RD InnoTech Limited, and a consortium of Standard Chartered (Hong Kong), Animoca Brands, and Hong Kong Telecom (HKT). These institutions have tested reserve asset management, redemption processes, and blockchain applications in the sandbox, with cumulative transaction value exceeding several hundred million HKD. Although BOCHK has not publicly disclosed its participation in the sandbox, its application plan aligns closely with these tests and is expected to focus on HKD-pegged stablecoins to support local payments and international settlements.

HKMA Deputy Chief Executive Arthur Yuen stated at a media briefing on July 29 that the first batch of licenses will be “limited in number,” mainly targeting HKD- and USD-pegged stablecoins, while offshore RMB-pegged stablecoins must have clear use cases and reserve assets. Applicants must meet minimum standards, including a registered capital of no less than HK$25 million, appointment of a Hong Kong-based CEO and stablecoin manager, and implementation of anti-money laundering (AML) and counter-terrorist financing (CFT) measures. On May 26, the HKMA released two consultation papers: “Draft Supervisory Guidelines for Licensed Stablecoin Issuers” and “Consultation Paper on AML and CFT Requirements,” with the consultation period ending on June 30.

Fierce Institutional Competition: BOCHK Leads, Multiple Giants Follow

BOCHK’s entry is not an isolated case but a reflection of intensifying competition in Hong Kong’s stablecoin market. On August 8, Standard Chartered (Hong Kong) announced the establishment of a joint venture, Anchorpoint Financial, with Animoca Brands and HKT, formally expressing its interest in applying to the HKMA. The joint venture has participated in sandbox testing since July 2024, aiming to issue HKD-pegged stablecoins and support the integration of Web3 and traditional finance. Ant International, the international arm of Ant Group, stated on June 12 that it would apply for an FRS issuance license through its overseas subsidiaries, targeting global deployment, including Singapore and Luxembourg.

In addition, JD Group Chairman Richard Liu publicly stated his hope to reduce cross-border payment costs by 90% and shorten settlement times to under 10 seconds through stablecoins. Even China National Petroleum Corporation (PetroChina) revealed on August 29 that it would assess the feasibility of a Hong Kong stablecoin license and explore the application of RMB-pegged stablecoins in energy trade, with annual trade volume approaching 300 million tons. According to China Daily, more than 40 institutions, including major internet companies, financial giants, and payment processors, are preparing to submit applications, with the first batch of approved institutions expected to be led by BOCHK and Standard Chartered.

This wave of institutional entry is fueled by Hong Kong’s policy dividends. Christopher Hui, Secretary for Financial Services and the Treasury, stated that the authorities aim to issue licenses within the year, although the number will be limited (expected to be in single digits), but will help Hong Kong become a global digital asset hub. In line with global trends, the EU’s MiCA regulation has come into effect in 2024, the US GENIUS Act is underway, and Japan and Singapore have similar frameworks.

Far-reaching Market Impact: Opportunities and Challenges Coexist

BOCHK’s stablecoin plan is expected to trigger a chain reaction in the crypto market. The total market value of stablecoins has reached $232 billion, mainly used for crypto trading and DeFi. In Hong Kong, regulated stablecoins can boost trading volume and drive innovation in tokenized assets such as bonds and trade finance. A KPMG report points out that Hong Kong banks are exploring wholesale CBDC and asset tokenization through Project Ensemble, with participants including BOCHK, HSBC, and Standard Chartered. Experts predict that such initiatives could save billions of HKD in cross-border payment costs annually and attract more FinTech talent.

However, challenges cannot be ignored. High compliance thresholds may raise costs for small and medium-sized issuers, and the OTC market (such as street crypto exchange shops) still has regulatory blind spots. Mainland China’s attitude towards stablecoins remains ambiguous, with a brief suspension of related discussions in August to prevent fraud risks. In addition, reserve asset management must strictly segregate client assets to avoid a repeat of incidents like the 2022 TerraUSD collapse.

Looking Ahead: Hong Kong Leads the Asian Digital Finance Wave

BOCHK’s application is not only a strategic move by a single bank, but also a milestone in the digital economic transformation of Hong Kong and even Asia. HKMA Chief Executive Eddie Yue emphasized in a speech on June 23 that stablecoins will “unlock the potential of financial connectivity” and help Hong Kong maintain its status as an international financial center. As the September 30 application deadline approaches, the market is focused on the first batch of approved institutions. This “stablecoin race” may reshape the global digital asset landscape, driving a shift from US dollar dominance to multi-currency diversification.

See more Web3 news... Download the Techub News APP

Scan the code to download the Techub APP for more Web news