Hong Kong to Issue First Stablecoin Licenses in 2026 with Rigorous Reserve Requirements

Hong Kong is set to issue its first batch of stablecoin licenses by early 2026, marking a significant milestone in the region's digital asset regulatory framework. The city has established itself as the first jurisdiction mandating that stablecoin reserves be exclusively backed by High Quality Liquid Assets (HQLA)—ultra-safe, short-term holdings convertible to cash on demand. This stringent requirement has not deterred interest, signaling strong demand for regulated crypto exposure without the volatility risks associated with other digital assets.

The new Stablecoin Ordinance, effective August 1, aims to restore trust in Hong Kong's crypto market following high-profile scandals like the collapse of JPEX, an unlicensed platform accused of defrauding investors of $166 million. Dr. Hin Liu, an Oxford University lecturer and digital asset consultant, notes that the ordinance positions Hong Kong as a robust hub for crypto business, countering public skepticism fueled by NFT crashes and scams.

The Hong Kong Monetary Authority (HKMA) will oversee the entire stablecoin ecosystem, from licensing to reserve management and redemption, while the Securities and Futures Commission (SFC) retains its regulatory role. This centralized approach underscores the city's commitment to fostering a secure and transparent digital asset market.