36 Companies Securing Hong Kong Stablecoin Licenses! HKMA to Launch in March, Mainland China Bans Cross-Border Arbitrage

The Hong Kong Monetary Authority received 36 applications for stablecoin licenses, with only a small number of the first batch issued in March. Yu Weiwen said that “first strict stability” and then relaxed. However, at the end of 2025, the mainland made it clear that stablecoins are virtual currencies and are included in illegal financial supervision, and mainland investors’ cross-border participation is still subject to exchange control restrictions.

36 Grab the first batch of small number of licenses and announce the winner in March

Stablecoin license issuance welcomes new progress. According to China Central Radio and Television’s “Voice of the Greater Bay Area”, on February 2, the Panel on Financial Affairs of the Legislative Council of the Hong Kong Special Administrative Region held a meeting, and Yu Weiwen, President of the Hong Kong Monetary Authority, introduced at the meeting that 36 applications for Hong Kong stablecoin issuer licenses have been received and are being evaluated. The relevant review and study work is about to be completed, and the HKMA is aiming to issue the first batch of stablecoin licenses in March.

Yu pointed out that only a small number of licences will be issued in the first batch. This definition of “small amount” has sparked speculation in the market. Only a small number of licenses were issued out of 36 applications, implying that the review was extremely rigorous, with a pass rate of less than 20%. This scarcity makes obtaining a license itself a significant competitive advantage. The first batch of licensed institutions will seize market opportunities under the regulatory umbrella to build brand recognition and user base, while the unsuccessful candidates may have to wait for the second batch or even longer.

The HKMA has requested additional information from some applicants, such as details of stablecoin application scenarios, risk management, including investment in reserve assets, etc. Upon receipt of all materials, the HKMA will make a decision on whether to issue a licence as soon as possible. This supplementary requirement shows the HKMA’s strict control over details. Applicants need to prove that their stablecoins are not only technically feasible but also have clear application scenarios and a comprehensive risk management system.

“After the issuance of the first batch of Hong Kong stablecoin licenses, Hong Kong will take the lead in implementing a compliant stablecoin ecosystem, driving the implementation of tokenized assets, cross-border payments and other related financial innovation businesses, attracting relevant institutions and funds to lay out the Hong Kong market, and strengthening the layout of Hong Kong’s international financial center in the field of digital finance.” Wang Pengbo, chief analyst of Broadcom Consulting, commented. Mainland payment and financial platforms that have previously been deployed will also usher in the opportunity to carry out related businesses in compliance, and can also provide practical experience for global stablecoin supervision and promote the implementation of relevant cross-border regulatory cooperation.

Key elements of Hong Kong stablecoin license review

Application Scenario Details: It must be proven that stablecoins have a clear practical use, not purely speculative

Risk management system: Comprehensive risk identification, assessment and response mechanisms

Reserve asset investment: Fund deposits, investment strategies and liquidity management solutions

Cross-border compliance capabilities: Prove compliance with local regulations in the place of operation

Yu Weiwen: First be strict and then relax to prevent hype chaos

It is worth noting that Yu Weiwen also emphasized that the development of stablecoins in Hong Kong must be steady, so one of the key points to pay attention to when evaluating stablecoin license applications is the risk management capabilities of applicants. According to Hong Kong’s regulatory framework, stablecoin operators will be required to comply with local regulatory requirements if they have any cross-border activities in the future, including in mainland China, Singapore, London, ASEAN, etc. This stringent cross-border compliance requirement means that licensees must not only meet Hong Kong regulations but also demonstrate their ability to adapt to the rules of different jurisdictions.

Although Hong Kong is the “pioneer” in the development of stablecoins, the HKMA has always maintained a “stability-oriented” attitude towards Hong Kong’s stablecoins, focusing on risk management and control. Yu Weiwen has written many times before that investors should remain rational and must prevent excessive speculation by the market and public opinion. It has publicly stated that stricter regulatory requirements will inevitably limit the possibility of significant expansion of the stablecoin business in the short term, which is expected to have a reaction from the industry.

After all, the regulated Hong Kong stablecoin business is in its infancy, and it is obviously more conducive to the sustainable and healthy development of the market and issuers than to start too loosely and then clean up the chaos. This regulatory philosophy of “strict first and then loose” reflects Hong Kong’s cautious approach as an international financial center. In the event of a major risk event, it will not only harm the interests of investors, but also damage the reputation of Hong Kong’s financial center.

The industry believes that this is a practical choice that combines the risks of the global stablecoin market with Hong Kong’s financial development. In Wang Pengbo’s view, through strict license review and continuous risk control, it not only sets clear compliance standards for the industry, but also prevents potential financial risks such as reserve assets and cross-border transmission in advance, and promotes the orderly development of Hong Kong’s stablecoin industry under the premise of ensuring financial stability, which is in line with the consistent bottom-line thinking of Hong Kong’s financial supervision.

The mainland has completely banned cross-border arbitrage, and the dream is shattered

In the mainland, the meeting on the coordination mechanism for combating virtual currency trading speculation held at the end of 2025 pointed out that stablecoins belong to the category of virtual currencies, and their related business activities are included in the regulatory framework for illegal financial activities. Currently, stablecoins cannot meet compliance requirements such as customer identification and anti-money laundering, and there is a risk of being used for illegal activities such as money laundering, fundraising fraud, and illegal cross-border transfer of funds, so full-chain regulations need to be strengthened. This characterization is extremely harsh, equating stablecoins with virtual currencies, which means that the mainland’s regulation of stablecoins is as strict as that of cryptocurrencies such as Bitcoin.

This difference in regulation between Hong Kong and mainland China makes the cross-border application of Hong Kong stablecoins full of obstacles. Many market participants had hoped that Hong Kong stablecoins could become a bridge for mainland funds to go overseas or foreign funds to achieve cross-border arbitrage or asset allocation. However, the strict characterization of the mainland completely blocked this path. Mainland residents who use Hong Kong stablecoins for cross-border transfers still violate exchange controls and anti-money laundering regulations and face legal risks.

Since 2025, with the implementation of the “Stablecoin Ordinance” in Hong Kong, the virtual currency market has undercurrent, which has also given rise to illegal financial activities using emerging concepts such as “stablecoins” as gimmicks. Criminals take advantage of this hot spot to induce the public with high returns and commit fraud under the banner of investment, and financial regulatory authorities in many places have issued risk warnings about this. The emergence of this fraudulent activity is one of the reasons why regulators adopt a “tight first and then loose” strategy.

Wang Pengbo said that investors should clarify the differences in regulatory policies between the mainland and Hong Kong on stablecoins, and recommend that investors stay away from all kinds of unlicensed stablecoin products at home and abroad. At the same time, cross-border participation in Hong Kong’s licensed stablecoin-related business also requires compliance with relevant regulatory regulations such as mainland foreign exchange and cross-border transactions, be vigilant against irrational investment risks brought about by market speculation, and do not blindly participate in related trading activities. This proposal reveals the harsh reality: even if Hong Kong issues licenses, the participation of mainland investors is still extremely limited.