Hong Kong has recently emerged at the forefront of digital finance regulation globally. With the implementation of its Stablecoins Ordinance on August 1 2025, regulating an environment for issuers of stablecoins within Hong Kong was made possible, drawing significant interest from financial institutions including HSBC and Industrial and Commercial Bank of China (ICBC), both indicating interest in applying for licenses under this regime.
Hong Kong Stablecoin Licensing Framework
Hong Kong Monetary Authority (HKMA) has introduced a stringent licensing framework for stablecoin issuers. According to legislation, any entity operating stablecoin issuers in Hong Kong–or backed by Hong Kong dollars–must acquire a license from them before issuing stablecoins backed by Hong Kong dollars. The requirements include reserve asset management, redemption procedures and risk controls; with initial licenses only granted on limited scale in August 2025 by Mitrade and Reuters despite receiving interest from 77 institutions by August 2025 by Mitrade.
HSBC’s Move into Digital Finance
HSBC, one of Hong Kong’s biggest banks, recently expressed its intention to apply for a stablecoin license with the Hong Kong Monetary Authority (HKMA). While it’s yet unknown whether they will submit formal application by September 2025, their interest signals a strategic shift towards integrating digital assets into core services, which signals their commitment towards digital assets as assets for inclusion.
This move aligns with HSBC’s recent initiatives in blockchain technology. Notably, they launched Hong Kong’s first blockchain-based settlement service to facilitate more secure payments using tokenized deposits in Hong Kong dollars and U.S. dollars – marking a key step forward for their digital transformation and markting an exciting step in The Defiant’s digital journey.
ICBC Enters Digital Asset Market
Industrial and Commercial Bank of China (ICBC), the world’s largest bank by total assets, has also expressed an interest in Hong Kong’s stablecoin licensing regime. ICBC Asia Ltd in Hong Kong announced their intention to apply for one at the Hong Kong Monetary Authority, becoming only the second major Chinese bank after Bank of China (Hong Kong) (BOCHK) (ODaily News).
ICBC’s involvement reflects China’s increasing interest in digital assets and stablecoins as potential payment methods and trade finance tools. Furthermore, their involvement may pave the way for development of yuan-backed stablecoins that fit within China’s larger digital currency initiatives.
Implications of Blockchain for Digital Finance Ecosystem
Banks such as HSBC and ICBC’s interest in Hong Kong’s stablecoin licensing regime is indicative of the increasing convergence between traditional banking and digital assets. If granted licenses, these institutions could provide bank-backed stablecoins which enhance credibility and stability within the digital asset ecosystem.
Stablecoin integration could also accelerate, make more transparent and cost-effective cross-border transactions by cutting reliance on correspondent banking networks; an ambition shared by Hong Kong. This move fits with its aspirations to be a global center for digital finance and innovation.
Conclusion HSBC and ICBC’s pursuit of stablecoin licenses marks an important step in the evolution of digital finance. As Hong Kong expands its regulatory framework, the involvement of major financial institutions will play a crucial role in shaping digital assets’ futures; consequently, this licensing process not only affects participating banks directly but can set precedent for other jurisdictions considering similar approaches to regulation.
