HSBC and the Industrial and Commercial Bank of China (ICBC) are preparing to enter Hong Kong’s newly regulated stablecoin market, according to a Monday report from the Hong Kong Economic Journal. Both banks reportedly plan to apply for stablecoin licenses with the Hong Kong Monetary Authority (HKMA), positioning themselves to become key players in the city’s fast-developing digital asset ecosystem.
The HKMA has indicated that only a small number of licenses will be granted in the initial phase of the program. ICBC, the world’s largest bank by assets, and Standard Chartered are seen as frontrunners likely to secure first-round approvals, giving them an early competitive edge. HSBC’s entry further underscores the seriousness with which major international and Chinese banks are approaching Hong Kong’s push to become a leading hub for regulated digital finance.
Interest in the licenses has been overwhelming. By the end of August, 77 institutions had expressed intent to apply, though some applicants reportedly found the regulatory requirements stricter than anticipated. Hong Kong’s new Stablecoin Ordinance, effective since Aug. 1, set a high compliance bar and included a six-month transition period. The rules criminalize the offering or promotion of fiat-referenced stablecoins without a license and mandate strong safeguards for issuance and operations.
The rollout has already reshaped the local market. Several unlicensed stablecoin firms reported double-digit losses in August after the framework came into effect, with some tokens falling more than 20% in a day. Regulators described this as a healthy correction that weeds out weaker players, leaving room for stronger, fully compliant issuers.
Alongside licensing, regulators are tightening oversight of crypto custody. In mid-August, the Hong Kong Securities and Futures Commission (SFC) released new guidance, banning the use of smart contracts in cold wallets and imposing strict custody standards. The SFC also warned that hype around stablecoin regulation has heightened the risk of fraud, urging investors to avoid speculative behavior and carefully evaluate offerings.
If approved, HSBC and ICBC would bring mainstream credibility to Hong Kong’s stablecoin market, potentially accelerating institutional adoption. Their entry also signals that global banking giants increasingly view regulated digital assets not as a threat but as an inevitable extension of the financial system.
