Under the neon lights of Hong Kong streets, traders in Central, small shop owners in Sham Shui Po, and cross-border freight drivers are quietly connected by the same blockchain. This chain is called 'HKD Stablecoin.'
On June 6, 2025, an announcement in the Hong Kong SAR government gazette shook the fintech community — the (Stablecoin Regulation) will officially take effect on August 1. That night, the server load at JD Technology's blockchain lab surged by 40%, and Standard Chartered Bank's digital asset department urgently convened a cross-timezone meeting, while discussions in the WeChat group of Web3 entrepreneurs in Qianhai, Shenzhen, focused on whether there is still room for loosening the HKD 25 million threshold.
In this transformation reshaping the financial order, two core questions emerge: How do capital-rich institutions compete for scarce issuance licenses? How do ordinary users catch this train of financial innovation? The answers are hidden in the encrypted wallets of sandbox tests and written on the mobile payment interfaces of restaurant owners.
1. License Competition: Who is the Rule Maker?
The Hong Kong Monetary Authority has designated a 'regulatory sandbox' as a testing ground, selecting three groups of institutions as the first pioneers in the stablecoin ecosystem: JD Technology's JD Coin Chain Technology, the Yuan Coin Innovation Technology led by Chen De Lin, and the 'Finance + Technology + Communication' triangle formed by Standard Chartered Bank and Animoca Brands and Hong Kong Telecom. These institutions are experiencing a thrilling leap from technical validation to commercial implementation.
Core Threshold for License Application
Capital Strength Test: Non-bank institution applicants must cross the hard threshold of HKD 25 million in paid-in capital, which is enough to block most startups. However, 'recognized institutions' such as banks can be exempt from this requirement, opening a fast track for traditional financial giants like Standard Chartered.
Reserve Asset Shackles: Issuers must hold high-quality liquid assets equivalent to the market value of the circulating stablecoins, and each type of stablecoin must be managed in an independent asset pool. Imagine an institution issuing both HKD and USD stablecoins; its vault must have two completely distinct reserves.
Redemption Mechanism Iron Rule: When a user clicks the 'redeem' button, the issuer must complete the payout within a reasonable time and may not charge additional fees, which requires its liquidity management system to have bank-level responsiveness.
Practical Challenges of Compliance Regulatory Requirements: Capital reserve of HKD 25 million in paid-in capital + 100% asset coverage. The utilization rate of small and medium-sized enterprises' funds has sharply declined. Asset custody must be classified and stored in recognized institutions. The complexity of multi-currency asset management has doubled. Risk control systems must comply with AML/CTF real-time monitoring systems. On-chain transaction tracking technology has a high threshold. Information disclosure requires monthly reserve reports + annual audits, balancing operational transparency with commercial confidentiality.
Three Realistic Paths to Breakthrough
Universal Issuer: Standard Chartered Bank, relying on its position as a note-issuing bank in Hong Kong and its ready-made clearing network, has achieved second-level interoperability with its tested HKD stablecoin SC-HKD and its telegraphic transfer system.
Scenario-based Service Provider: Liu Peng, CEO of JD Coin Chain Technology, revealed that they are embedding stablecoins into cross-border payment scenarios. When mainland consumers order milk powder on JD's Hong Kong-Macao site, the Hong Kong merchants will receive HKD-Token based on Ethereum, rather than HKD that has gone through multiple levels of clearing.
Compliance Technology Provider: Some startups that cannot meet the capital threshold are transforming into 'the power behind the licenses.' A blockchain team from Shenzhen has developed a multi-chain wallet system for licensed institutions, successfully reducing cross-border exchange fees to 0.3%, only 1/109 of traditional banks.
2. New Ecosystem of Inclusive Finance: How Stablecoins Change Lives
Mr. Chen, the owner of a dried seafood shop in Sheung Wan, often shows customers the bouncing numbers on his phone: 'Previously, receiving payment from Singapore customers took 3 days; now this 'Yuan Coin' arrives in seconds, and the exchange rate is much better.'
Four Scenarios Restructuring Financial Experience
Cross-border Payment Revolution: Using the multilateral Central Bank Digital Currency Bridge (m-CBDC Bridge) technology, trade settlements from Hong Kong to Singapore have been compressed from 3 days to 2 minutes. Four-party Jingdong Technology revealed that the new system saves nearly ten thousand dollars in fees for every million HKD transaction. As the cargo ship just departs from Victoria Harbour, the digital wallet of the Malaysian supplier has already sounded the incoming payment notification.
Digital Asset Trading Infrastructure: Among the 10 licensed virtual asset exchanges in Hong Kong, 9 have opened stablecoin trading pairs. When Bitcoin prices fluctuate sharply, investors can switch to HKD stablecoins for hedging with one click, avoiding the cumbersome process of fiat currency deposits and withdrawals. This 'trading safe haven' model is attracting retail investors from Southeast Asia.
DeFi Yield Explosion: The annualized yield of HKD stablecoin pools in decentralized lending platforms has reached 8.3%, far exceeding bank fixed deposit rates. However, the Monetary Authority has warned: algorithmic stablecoins are not under regulatory protection, and users participating in high-yield products like Anchor Protocol must bear the risks themselves.
Inclusive Finance Reach: Filipino maid Rose converts HKD stablecoins directly into her hometown's GCash e-wallet every month through the StablePay application developed by Hong Kong Telecom. This is 6 hours faster than Western Union remittance, with fees only 1/45 of it. This 'remittance home' model is being emulated by Singapore and Dubai.
3. Underlying Currents: Policy Gaps and Risk Warnings
While law firms in Central Hong Kong are working overtime to draft compliance documents for stablecoins, blockchain companies in Nanshan Technology Park, Shenzhen, are facing a more severe regulatory environment. There are no signs of loosening in the mainland's ban on virtual currencies, and the updated (Illegal Financial Activities Penalty Regulation) in 2025 will still define stablecoin issuance and trading as violations.
Cross-border Compliance Lifeline
Mainland Enterprises' Circumvention Strategy: Ant Group's Micro-Technology obtained a Stored Value Facility (SVF) license through its Hong Kong subsidiary, and its developed cross-border trade settlement platform has served over 200 foreign trade enterprises in the Pearl River Delta. However, legal professionals warn that if the platform actively promotes HKD stablecoin payments to mainland merchants, it may trigger the 'active promotion' clause in the (Regulation), requiring a Hong Kong license.
Difference in User Rights Protection: The Hong Kong court's groundbreaking ruling in the JPEX fraud case stated that trading platforms must compensate investors for losses. In a certain Bitcoin lending dispute in the mainland, however, the court dismissed the lawsuit on the grounds of 'virtual currency being illegal,' leaving investors with nothing. This gap in judicial protection has led to the emergence of specialized arbitration services — a certain Hong Kong-Shenzhen law firm launched a 'chain-based evidence solidification' service, with a threefold increase in cases received over six months.
Wallet Security Red Line: The hardware wallet theft case uncovered in Hong Kong in 2024 reveals that self-custody is not absolutely safe. Criminal gangs forged Ledger wallets to steal stablecoins worth tens of millions. The Monetary Authority immediately required licensed issuers to provide custody cold wallet solutions for retail users.
Finally! On the crest of financial reconstruction
In the financial buildings on both sides of Victoria Harbour in Hong Kong, the first batch of stablecoin license application documents is being encrypted and transmitted. The capital threshold of HKD 25 million erects a high wall but also ensures the robust growth of the ecosystem within. When Standard Chartered Bank tests processing a thousand cross-border remittances per second on-chain, the vendors in the Sham Shui Po market have already started scanning HKD-Stablecoin for payments with their phones — financial transformation has never been just an elite game.
Mainland investors need to be clear: The HKD stablecoin wallet recognized by the Hong Kong Monetary Authority is fundamentally different from WeChat Pay in the mainland. On both sides of the winding Shenzhen River, two digital financial universes are divided. History tells us that all great financial innovations are often born on the razor's edge of regulation and innovation.
As the effective date of August 1 approaches, a silent revolution in financial infrastructure is unfolding. Whether it is the capital giants competing for issuance licenses or the shop owners in corner tea restaurants collecting payments via QR codes, they have all become the first immigrants in the new currency era. The digital HKD bouncing on their phones is quietly rewriting the first line of code in a century of financial history in Hong Kong.
Blockchain will not change the essence of value, but it provides a new interpretation of value flow. When the Legislative Council of Hong Kong passes the (Stablecoin Regulation), the bronze bull statue in the Central trading hall remains silent; but three kilometers away in the electronics market of Sham Shui Po, an acrylic sign printed with a QR code has quietly changed — the new sign has a line of small text at the bottom right: 'Supports HKD-Token payments.'
