Trio aims to launch HKD stablecoin under new venture

Standard Chartered Hong Kong, Animoca Brands, and Hong Kong Telecommunications (HKT) are collaborating to launch a Hong Kong dollar-backed stablecoin through a new joint venture.

The partnership intends to apply for a license from the Hong Kong Monetary Authority (HKMA) under the city’s upcoming stablecoin bill.

The involvement of Standard Chartered is noteworthy, considering Hong Kong's unique monetary system where the HKMA oversees the issuance of Hong Kong dollars by HSBC, Bank of China (Hong Kong), and Standard Chartered, rather than directly issuing currency itself.

Animoca Brands, a major player in the blockchain industry, and HKT, specialising in mobile payment systems, add further expertise to the venture.

The joint venture aims to explore various stablecoin applications, including domestic and cross-border payments.

The venture will seek a license under Hong Kong’s proposed stablecoin bill, which entered the Legislative Council on December 6, 2024, and underwent its first reading on December 18.

If passed, the bill will require stablecoin issuers to obtain an HKMA license and adhere to reserve and price stability requirements.

The bill specifies that entities issuing fiat-referenced stablecoins (FRS) in Hong Kong must be licensed.

A license application can only be made by (i) a company incorporated in Hong Kong or (ii) an authorised institution (AI) incorporated outside Hong Kong.

The three companies have been participating in Hong Kong’s stablecoin issuer sandbox since July 2024, alongside Jingdong Coinlink Technology and RD InnoTech.

According to the HKMA, the stablecoin issuer sandbox is designed to demonstrate genuine interest in and a reasonable plan on issuing fiat-referenced stablecoins in Hong Kong.

Hong Kong is positioning itself as a digital asset hub, having already approved spot Bitcoin and Ether exchange-traded funds and implemented a strict licensing regime for crypto exchanges.

So far, nine platforms have obtained licenses from the Securities and Futures Commission (SFC).