Hong Kong has already missed its March timeline for issuing Hong Kong dollar stablecoin licenses, with the Hong Kong Monetary Authority (HKMA) yet to approve any issuers despite public signals that the program would begin rolling out last month.
At the Hong Kong Consensus Conference in February, Financial Secretary Paul Chan Mo-po said that licenses would begin to be issued in March as part of Hong Kong’s efforts to position itself as a financial regulatory center for stablecoins and tokenization. A lack of approval so far has pushed that timeline back to April and raised questions about how quickly the framework can move from policy to implementation.
“When issuing licenses, we ensure licensees have novel use cases, reliable and sustainable business models, and strong regulatory compliance capabilities,” he told the CoinDesk Hong Kong conference.
Hong Kong’s South China Morning Post reported in March that HSBC and a joint venture between Standard Chartered and Animoca were expected to be among the first companies to receive stablecoin licenses.
HSBC and Standard Chartered are the two note-issuing banks in Hong Kong, a status that directly links them to the Hong Kong dollar’s issuance framework and highlights the close connection between the stablecoin system and the existing monetary infrastructure.
The system dates back to 1846, when private banks began issuing currency backed by silver deposits in the absence of a colonial central bank.
Today, each note-issuing bank deposits U.S. dollars into the government’s Exchange Fund at a fixed interest rate of HK$7.80 per U.S. dollar and receives a certificate of debt in return, against which it prints banknotes.
Hong Kong Monetary Authority Chief Executive Eddie Yue made a similar comparison in a December 2023 blog post.
Yue writes that banknotes issued by commercial banks in exchange for deposited silver before 1935 were a form of “private currency,” and stablecoins functioned as their blockchain-based equivalents — tokens with stable value that could serve as an on-chain medium of exchange.
A spokesman for the HKMA did not disclose the reason for the delay.
“The HKMA is actively progressing licensing matters and will announce further details in due course,” a spokesperson told CoinDesk.