The Hong Kong Monetary Authority (HKMA) is likely to issue the first batch of stablecoin licences early next year, as the city’s de-facto central bank urged potential issuers to submit their applications by the end of September.
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Ahead of the stablecoin ordinance taking effect on August 1, the HKMA unveiled on Tuesday licensing procedures and explanatory notes, as well as two sets of guidelines for supervising licensed stablecoin issuers, and anti-money-laundering and counterterrorism financing requirements for regulated stablecoin activities.
Darryl Chan Wai-man, deputy chief executive of HKMA, said the regulator’s emphasis was on the importance of financial management when it issues licences to stablecoin issuers.
When asked about the issuance of stablecoin licences, Chan said a realistic timeline was “early next year”.
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“Considering Hong Kong’s well-established systems, we do not expect to achieve large-scale [stablecoin adoption] immediately in the early stages,” he said. “Instead, we aim to progress step by step, gradually driving the digital transformation of Hong Kong.”
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Applicants must demonstrate a well-developed, feasible business plan to ensure the sustainability and stability of their proposed stablecoin, according to Chan. “Risk management, including asset management and IT infrastructure, is also an important factor when considering licence issuance,” he said.