TLDR
- 77 firms express interest in Hong Kong’s stablecoin licensing process
- Applicants range from traditional banks to fintech companies and state-owned enterprises
- HKMA emphasizes rigorous vetting process for technical proficiency and operational resilience
- Stablecoin licenses may not be approved until 2025 due to extensive due diligence
- The outcome could set global standards for digital payment infrastructure and crypto regulation
Hong Kong’s stablecoin licensing process has sparked significant interest, with 77 firms expressing interest in the new crypto regulation. The Hong Kong Monetary Authority (HKMA) has received applications from a mix of traditional banks, fintech companies, and even state-owned enterprises.
This interest highlights the growing push for involvement in the digital payment infrastructure. The competition is fierce as organizations vie for one of the licenses, although approval will take time. The HKMA has warned that approvals could take until 2025.
HKMA Sets Strict Standards for Stablecoin Licensing
The 77 expressions of interest include a wide range of applicants from multiple industries. Among these are major banks such as Standard Chartered, fintech giants like Ant Group, and Web3 startups.
Additionally, state-owned enterprises such as PetroChina have explored the use of stablecoins for cross-border settlements. The diverse nature of these applicants signals that the competition is not just limited to crypto-native firms. According to the HKMA, however, these expressions of interest are just the first step in a lengthy process.
“An expression of interest is not a guarantee of approval,” an HKMA spokesperson said. The authority has emphasized that the licensing process will be strict. It will focus on technical proficiency, reserve backing, and operational resilience.
Moreover, anti-money laundering (AML) protocols are expected to meet high standards. The authority’s approach is designed to ensure stability in the market and to separate viable projects from aspirants.
Hong Kong’s Stablecoin Review Process to Take Months
Despite the overwhelming interest, Hong Kong’s stablecoin licensing process has effectively frozen as the HKMA reviews applications. The Stablecoin Ordinance, which took effect on August 1, is still in its early stages.
HKMA Deputy CEO Darryl Chan Wai-man noted that the authority is currently dealing with a “heavy workload.” He explained that due diligence is required for the careful vetting of the applications. The HKMA plans to thoroughly assess each one, ensuring that applicants meet the high standards set by the new crypto regulation framework.
This careful filtering process is intended to ensure that only the most credible projects receive a license. The long wait times have not deterred firms from applying, with many companies eager to secure a license. However, the HKMA has made it clear that it will not rush the decision-making process. The final approval could be months away as regulators continue their thorough evaluations.
The global impact of Hong Kong’s stablecoin regulation cannot be overstated. The HKMA’s careful selection of stablecoin issuers will play a pivotal role in shaping the future of digital payments. Stablecoins, with their promise of fast, secure, and low-cost transactions, are gaining traction as alternatives to traditional payment systems.
