HSBC and ICBC Set to Apply for Stablecoin Licenses in Hong Kong
HSBC and the Industrial and Commercial Bank of China (ICBC), the world’s largest bank by assets, are reportedly preparing to apply for stablecoin licenses under Hong Kong’s recently implemented regulatory framework. According to a report by the Hong Kong Economic Journal, both institutions have indicated their intention to seek approval from the Hong Kong Monetary Authority (HKMA). Neither bank has commented publicly on these plans.
First-Round Approvals Likely for ICBC and Standard Chartered
The HKMA is expected to issue only a limited number of stablecoin licenses initially. Industry sources suggest that Standard Chartered and ICBC are poised to be among the first recipients of these licenses, potentially securing a first-mover advantage in the market.
As of late August, 77 entities had expressed interest in applying for stablecoin licenses. Some applicants have noted that the licensing requirements are more stringent than anticipated, reflecting the regulator’s cautious approach.
Stringent Regulatory Environment Under the New Stablecoin Ordinance
Hong Kong’s Stablecoin Ordinance, which took effect on August 1 with a six-month transition period, criminalizes the offering or promotion of unlicensed fiat-referenced stablecoins to retail investors. The ordinance establishes rigorous standards for issuers, aiming to enhance investor protection and market integrity.
The introduction of the new rules has coincided with notable market volatility. Several stablecoin companies operating in Hong Kong experienced double-digit declines, with some dropping as much as 20% in a single day. Market analysts have characterized these movements as a healthy correction in response to the unexpectedly strict regulatory environment.
Enhanced Crypto Custody Regulations Complement Stablecoin Licensing
Following the establishment of the stablecoin regime, Hong Kong regulators have intensified focus on cryptocurrency custody practices. In mid-August, the Securities and Futures Commission (SFC) issued immediate guidance mandating comprehensive security controls and prohibiting the use of smart contracts in cold wallet custody solutions.
Regulatory Caution Amid Increased Fraud Risks
The SFC has warned that the new stablecoin framework has heightened the potential for fraud, driven by increased market speculation and investor enthusiasm. Authorities have urged caution, advising investors to avoid impulsive decisions based on market hype or price momentum.
FinOracleAI — Market View
The announcement that major banks like HSBC and ICBC are pursuing stablecoin licenses under Hong Kong’s stringent new regime signals strong institutional interest but also reflects regulatory caution. The limited number of initial licenses and strict requirements suggest a controlled rollout, which may temper market exuberance in the near term. Investors should monitor the licensing outcomes and regulatory enforcement closely, as these will set precedents for market participants and influence the pace of stablecoin adoption in the region.
Impact: neutral
