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INDIA - 2025/05/22: In this photo illustration, a Bitcoin logo is seen displayed on a smartphone with the Hong Kong flag in the background. (Photo Illustration by Avishek Das/SOPA Images/LightRocket via Getty Images) Sopa Images | Lightrocket | Getty Images
Hong Kong's central bank is pressing ahead with plans to issue an initial batch of stablecoin licenses in March, despite China's long-standing opposition to cryptocurrency activity. Experts, however, see Hong Kong's stablecoin plans as more of a hedge than a reversal of Beijing's position. "We hope that by March we will be able to make a decision," Eddie Yue, Chief Executive of the Hong Kong Monetary Authority, told a Legislative Council meeting on Feb. 2, adding that the authority was reviewing an initial tranche of 36 stablecoin issuer applications, according to an official interpreter. Yue's update comes after plans to allow for the issuance of stablecoins within Hong Kong were reportedly stalled by Beijing. Stablecoins are cryptocurrencies designed to maintain relatively stable values by pegging them to assets such as fiat currencies or gold, reducing price volatility compared with other digital tokens. Hong Kong passed its Stablecoins Ordinance in May, requiring licenses for entities that issue stablecoins within the territory or peg them to the Hong Kong Dollar. The law took effect in August, and the HKMA began accepting applications soon after.
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Jordan Wain, policy advisory lead from Chainalysis, said that stablecoins now account for more than half of the value of transactions recorded directly on blockchains, making them "central to the crypto ecosystem." In a memo, the HKMA cited cross-border payments or tokenized deposit systems for international banks as potential use cases for stablecoins within the territory. Tokenized deposit systems refer to digital representations of customer deposits on blockchain networks, regulated within the traditional banking system. Prospective issuers such as payments technology firm Payment Cards Group claim that Hong Kong dollar-backed stablecoins would enable "faster refunds, quicker cross-border payments, and more transparent foreign exchange rates." According to Wain, a growing number of regulators and financial institutions are exploring growth opportunities in stablecoins, pointing to Japan and Europe, which already have established regulatory frameworks for adoption.
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