Hong Kong Opens Second Round of Stablecoin License Applications, Compliance Hurdles Take Center Stage

The Hong Kong Monetary Authority (HKMA) this week officially opened the second application window for stablecoin issuer licenses, following the closure of the first round in June 2025. According to the regulator's announcement, applications in this round will adhere to the framework set out in the Stablecoins Ordinance, requiring applicants to hold a minimum paid-up capital of HK$25 million and meet anti-money laundering (AML) and know-your-customer (KYC) requirements. Several international institutions, including Circle and Ripple, have expressed interest in applying, though the HKMA has not disclosed a specific list.

Industry analysts note that Hong Kong is seeking to gain a first-mover advantage in stablecoin regulation across Asia, with its licensing framework emphasizing reserve asset custody, redemption mechanisms, and on-chain transaction monitoring. Unlike Singapore's Payment Services Act (PSA), Hong Kong requires issuers to place reserve assets with locally licensed banks and disclose reserve details on a daily basis. This design aims to prevent incidents similar to the TerraUSD collapse, but it also raises compliance costs for smaller and mid-sized institutions.

The second application window will remain open until March 2026. The HKMA has indicated that it will prioritize applicants with cross-border settlement capabilities. As Hong Kong gradually aligns with the mainland's digital yuan pilot program, some market participants anticipate that licensed stablecoins could eventually be integrated into trade settlement scenarios within the Guangdong-Hong Kong-Macao Greater Bay Area, though specific details have yet to be announced.