Hong Kong Postpones Stablecoin Licence Awards

Hong Kong has delayed the issuance of its first stablecoin licences, missing the initial target of the end of March. The Hong Kong Monetary Authority (HKMA) confirmed that the licensing process is still underway, but did not provide a new timeline for announcements.

HKMA Statement on Licensing Progress

A spokesperson for the HKMA told Cointelegraph that the authority is “actively taking forward the licensing matter and will announce further details in due course.” The statement offered no specific date for when the first licences will be granted.

Expected Limited Initial Approvals

Focus on Risk Management and Compliance

Sources indicate that only a limited number of issuers are expected to be approved in the initial phase. Reviews are heavily focused on key areas including token use cases, risk management protocols, anti-money laundering (AML) controls, and the quality of backing assets.

Stablecoin Framework Requirements

Hong Kong’s regulatory framework for stablecoins requires issuers to fully back their tokens with high-quality liquid reserves. Issuers must also process redemption requests within one business day and establish a physical presence in Hong Kong.

KYC and Transaction Monitoring

The framework also mandates robust Know Your Customer (KYC) procedures and comprehensive transaction monitoring controls. These requirements align with broader efforts to regulate the digital asset space.

Regulatory Context

The delay comes after regulators in mainland China, including the People’s Bank of China and the Cyberspace Administration of China, expressed concerns regarding privately controlled digital currencies. This regulatory scrutiny likely influences the HKMA’s cautious approach.

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