Hong Kong will start issuing its first stablecoin issuer licenses in March, with the city’s regulator set to approve only a “very small number” of applicants in the initial phase. The move marks a cautious but concrete step toward a fully regulated stablecoin regime in one of Asia’s key financial hubs.

According to ChannelNewsAsia, HKMA Chief Executive Eddie Yue told Hong Kong’s Legislative Council on Monday that the review of license applications is nearing completion and that the first batch will be granted next month.

Considerations for Approving Issuers

Yue said the Hong Kong Monetary Authority will focus on several core areas when approving issuers, including risk management Risk Management One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, Read this Term frameworks, anti-money laundering measures and controls, and the quality and composition of assets backing the stablecoins.

Licensed issuers must also comply with local rules when engaging in cross‑border activities, with the possibility of mutual recognition arrangements with other jurisdictions explored at a later stage.

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CFD brokers are increasingly turning to stablecoins because traditional card-based payments are slow, expensive, and operationally cumbersome for cross-border flows.

Card transactions often involve 2–4% processing fees, delayed settlements, chargeback risk, and limited card access in some regions, all of which create friction for brokers trying to serve a global, high-volume client base.

“Institutional payment providers are already using stablecoins as a back-end settlement layer, keeping existing client interfaces while cutting 60–80% of correspondent banking costs and compressing settlement times from days to under an hour,” Fractional CPO and product strategy consultant Melissa Stringer recently commented.

What It Means for Brokers

For FX and CFD brokers, the launch of a regulated stablecoin Stablecoin Unlike other cryptocurrencies like Bitcoin and Ethereum, stablecoins are cryptocurrencies that have been designed to keep a stable value. Placing a greater emphasis on stability over volatility can be a huge draw for some investors. Many individuals can be turned off from large swings and uncertainty presented by cryptos relative to other traditional assets.Stablecoins control for this volatility by being pegged to another cryptocurrency, fiat money, or to exchange-traded commodities, including Unlike other cryptocurrencies like Bitcoin and Ethereum, stablecoins are cryptocurrencies that have been designed to keep a stable value. Placing a greater emphasis on stability over volatility can be a huge draw for some investors. Many individuals can be turned off from large swings and uncertainty presented by cryptos relative to other traditional assets.Stablecoins control for this volatility by being pegged to another cryptocurrency, fiat money, or to exchange-traded commodities, including Read this Term framework in Hong Kong introduces the prospect of using licensed tokens for client funding, margin, and internal settlements, subject to how individual firms update their policies.

Read more: Gold Backed Stablecoins Wait as Hong Kong Holds to Fiat-Only Rules

Liquidity providers could see regulated Hong Kong‑issued stablecoins emerge as a new collateral and settlement layer, particularly for cross‑venue flows in Asia.

Trading platform providers may also need to prepare for potential integration with HKMA‑licensed stablecoins, both at the wallet and payment‑rail level, as regulated digital money gains traction in trading workflows.

Market participants will watch which issuers make the first cut in March and how quickly the HKMA expands the pool. For now, the limited number of licenses points to a regime that prioritizes control and supervisory comfort over rapid scale.