When Hong Kong’s Financial Secretary Paul Chan addressed stablecoins at the 2026 World Economic Forum in Davos, the significance of his remarks lay not in grand ambition but in their restraint. There were no sweeping claims about reshaping global finance, nor statements framing stablecoins as a challenge to existing monetary systems.
Instead, Chan outlined something more characteristic of Hong Kong’s regulatory tradition: a measured transition from experimentation to formalization, grounded in financial stability and institutional continuity.
Hong Kong is now preparing to issue its first stablecoin issuer licenses in early 2026. While the timeline itself is notable, the deeper importance lies in how the city has chosen to proceed — and what this approach reveals about its evolving role in digital finance.
Stablecoins — digital tokens designed to maintain a one-to-one peg with fiat currencies — have moved steadily from the margins of crypto markets toward the core of financial infrastructure.
Increasingly, they are discussed not as speculative instruments but as tools for cross-border payments, tokenized asset settlement and liquidity management. Yet regulatory responses across jurisdictions remain uneven, ranging from permissive experimentation to outright restriction.
Hong Kong’s approach sits deliberately between these extremes.
From sandbox to statute
The city’s stablecoin policy did not arise from market enthusiasm alone. In mid-2024, the Hong Kong Monetary Authority (HKMA) launched a stablecoin issuer sandbox, allowing selected participants to test issuance models under close regulatory engagement.
The focus was intentionally technical and operational: reserve management, redemption mechanisms, custody arrangements, governance structures and compliance with anti-money-laundering standards.
This was not a symbolic exercise. The sandbox was designed to surface operational weaknesses before any statutory regime came into force. By prioritizing economic substance over technological novelty, the HKMA made clear that stablecoins would be regulated as a financial activity, not treated as a technological exception.
In this respect, Hong Kong avoided a mistake seen elsewhere, where innovation preceded oversight and regulation followed only after market stress emerged.
Davos and the language of predictability
At Davos, Chan reaffirmed a principle that now anchors Hong Kong’s digital asset framework: “same activity, same risk, same regulation.”
While unremarkable in theory, the principle carries weight in application. It implies that authorized stablecoin issuers will face standards comparable to those applied to traditional financial institutions, including robust reserve backing, enforceable redemption rights, clear governance and effective safeguards against financial crime.
Equally important was the signalling of a credible timeline. By indicating that licenses could be issued as early as the first quarter of 2026, Hong Kong offered a degree of policy predictability that remains rare in digital finance. For institutional participants, predictability often matters more than speed.
Market expectations — and their limits
As of now, no company has been formally granted a stablecoin license in Hong Kong, and the official register remains empty. Nevertheless, regulatory engagement, sandbox participation and public disclosures provide some insight into how the first phase may unfold.
Anchorpoint Financial Limited — a joint venture involving Standard Chartered Bank (Hong Kong), Animoca Brands and Hong Kong Telecom — has publicly stated its intention to apply for a license and to issue a Hong Kong dollar-pegged stablecoin.
Its cross-sector structure and early engagement with regulators have made it one of the most visible potential candidates.
HashKey Group, another early advocate of the regime, has emphasized the flexibility of Hong Kong’s framework and its readiness to proceed once licensing opens. While no specific stablecoin product has been disclosed, the group’s positioning reflects confidence in regulatory direction rather than speculation on outcomes.
RD InnoTech is also frequently cited by market observers. Backed by RD Technologies, founded in 2020 by former HKMA chief executive Norman Chan, the firm is focused on the development of HKDR, a Hong Kong dollar-referenced stablecoin, alongside its regulatory and compliance infrastructure.
Its early engagement with regulators and explicit alignment with Hong Kong dollar-based issuance place it among the more credible potential applicants should licenses be issued in stages.
By contrast, expectations surrounding China-affiliated firms, including JD Coinlink Technology (Hong Kong), are more cautious. In light of policy signals and official statements from the People’s Bank of China regarding stablecoins and related digital currency activities, market participants generally do not assume such entities will feature prominently in the initial licensing phase.
These assessments, however, remain market interpretations rather than regulatory commitments.
Autonomy by design
What distinguishes Hong Kong’s stablecoin framework is not simply its technical architecture, but its policy logic.
The transition from sandbox experimentation to formal licensing represents institutional evolution rather than radical disruption. Chan’s Davos remarks conveyed a quiet confidence: stablecoins can be incorporated into an existing regulatory order without undermining financial stability.
More broadly, the framework underscores Hong Kong’s intention to formulate stablecoin policy according to its own financial system and market needs, rather than mirroring the development path adopted in mainland China.
In this respect, the stablecoin regime offers a contemporary illustration of “One Country, Two Systems” in operation — not as a constitutional slogan, but as a functional outcome within digital finance policy.
Beyond the first licences
As licenses are gradually issued, the most consequential questions will extend well beyond the identities of the initial issuers.
Governance standards, reserve transparency, cross-system interoperability and technological resilience will ultimately determine whether stablecoins mature into trusted financial infrastructure or remain confined to niche applications.
Viewed in this light, Hong Kong is not merely establishing a stablecoin regime. It is articulating a broader blueprint for how digital assets can be institutionalized within a conventional financial system — cautious, rules-based and jurisdiction-specific.
That blueprint is likely to be studied closely by other international financial centers navigating the same transition.
Jeffrey Sze is ambassador for arts, culture and tourism of Reichenau and chairman of Habsburg Asia. He serves as general partner of Archduke United LPF and Asia Empower LPF, focusing on cross-border institutional investment at the intersection of art, finance and regulated digital innovation, including AI and digital assets. In 2017, he was involved in securing one of Switzerland’s early cryptocurrency exchange licenses.