Author: Xie Zhaoqing, Tencent News 'Qianwang'
Ho Hongzhe, head of the Digital Finance Department at the Hong Kong Monetary Authority responsible for stablecoin license approval and related business, is one of the hottest names on the island recently. The 'Stablecoin Regulation' announced by the Hong Kong government will be implemented on August 1st, with stablecoins being brought under licensed management. "Old money" and newcomers are lining up to visit the Digital Finance Department of the Hong Kong Monetary Authority, hoping to gain an advantage in next month's license application.
"The external interest in Hong Kong's stablecoins this time is far higher than in the past few years," revealed an industry insider very familiar with the Hong Kong crypto scene who frequently deals with the Hong Kong Monetary Authority. This can be seen from the enthusiasm of mainland Chinese institutions in Hong Kong rushing to knock on the authority's door.
Stablecoins, born in the crypto world, aim to maintain a relatively stable value by pegging to a relatively stable asset (such as fiat currency, commodities, or a basket of assets). Since the Trump administration's strong promotion this year, they have quickly entered the mainstream view. Currently, the main types of stablecoins in the market include fiat-collateralized stablecoins, crypto-collateralized stablecoins, and algorithmic stablecoins.
Unlike previous narratives, blockchain-based stablecoins are relatively more convenient, efficient, and low-cost in payment and trading, making their future prospects promising, especially in cross-border payments. This is also seen as one of Hong Kong's largest development opportunities.
However, the 'Stablecoin Regulation' announced by the Hong Kong government is essentially a legal framework, with specific application details and potential guidelines not yet mentioned. Many individuals and institutions eager to participate in the stablecoin market are hoping to learn more.
The stablecoins announced by the Hong Kong government are pegged to fiat currency, with a 1:1 collateralization at face value, though the government has not limited the type of fiat currency. By pegging to fiat currency, stablecoins provide a relatively stable form of cryptocurrency, thereby reducing the volatility of traditional cryptocurrencies.
Over 20 Mainland Chinese Institutions Meet with Hong Kong Monetary Authority
Tencent News 'Qianwang' learned that over 20 mainland Chinese institutions have recently met with the Financial Technology Department of the Hong Kong Monetary Authority responsible for stablecoin matters. These institutions include, but are not limited to, mainland Chinese financial institutions and state-owned enterprises in Hong Kong. Ho Hongzhe and his team are busier than ever.
In addition to these proactive mainland Chinese institutions, some "old money" who have been absent from the spotlight in the wealthy circles and financial markets are actively forming teams in Central, hoping to participate in Hong Kong's stablecoin business. These include Dai Yonggai, the actual controller of the Renhe Business Group, Lin Yong, the former CEO of Haitong International once known as the "Central King," and Zhai Jun, founder of Yunlong Capital.
Moreover, institutions like Lenovo's Hony Capital are actively preparing stablecoin business teams, with Hony Capital having applied to join the government's stablecoin "sandbox" in 2024. However, as of the time of writing, Hony Capital has not commented on this matter.
In July 2024, the government announced three institutions entering the sandbox, including JD Chain Technology (Hong Kong) Co., Ltd., Yuanbi Innovation Technology Co., Ltd., and Li Ka-shing's Hong Kong Telecommunications.
Ant Group's Ant International and Ant Digital are actively communicating with regulators, hoping to apply for stablecoin licenses. Both are entrepreneurial business entities under Ant Group. In the 2024 restructuring, Ant Group established a new innovation business segment, primarily consisting of Ant International, Ant Digital, and OceanBase. Ant Group's Chairman and CEO Jing Xiandong serves as the chairman of Ant International, while Ant Digital's chairman is Han Xinyi. Ant International and Ant Digital operate independently, with Ant Group previously stating its support for the innovation business segment to accelerate market entry.
Tencent News 'Qianwang' learned that Ant International and Ant Digital's teams have been operating crypto-related businesses in Hong Kong for some time. Ant Digital has been promoting RWA (Real World Assets) business in Hong Kong, which could be one of its application scenarios for a stablecoin license.
RWA refers to tokenizing real-world assets, especially those generating stable income, such as hotel rentals, photovoltaic power generation, and even stocks, bonds, and commodities, using blockchain technology to enable trading, management, and circulation on-chain.
Simply put, RWA is tokenizing real-world assets and using blockchain technology for trading and management, essentially helping traditional assets with financing—a business that multiple teams in Hong Kong, including Ant Digital, have been working on in recent years.
Compared to more straightforward application scenarios like cross-border payments, some industry insiders are not optimistic about the combination of RWA and stablecoins. However, in addition to Ant Digital, the JD Chain team is also actively exploring this business direction, having "poached" many people from Ant Digital's RWA team.
Meanwhile, JD Chain has publicly announced its intention to apply for a stablecoin license in Hong Kong. Besides the RWA direction related to JD International Logistics, its plan also involves cross-border payment scenarios for JD Mall in Hong Kong, Macau, and Taiwan, though its scale is much smaller than Ant International's Alipay.
Alipay is a UK company acquired by Ant Group in 2019, focusing on providing international payment services for businesses and individual sellers, primarily in international remittances, foreign exchange option trading, and international e-commerce platform collection and settlement.
Public data shows that after Ant Group's acquisition and based on Alibaba's e-commerce business, the company's business grew rapidly. By the end of 2024, Alipay had processed a cumulative transaction amount of over $300 billion globally, serving more than 1 million merchants.
Tencent News 'Qianwang' learned that Ant International might use Alipay as a scenario for applying for a stablecoin license in Hong Kong, which is also the most closely watched payment application scenario by the Hong Kong Monetary Authority.
Given the advantages of stablecoins in cross-border payments under blockchain technology, such as low cost and high efficiency, they have enormous potential in cross-border transactions—hence, these "old money" and newcomers are actively seeking "cross-border payment scenario companies" for collaboration.
Tencent News 'Qianwang' learned that many cross-border payment companies have been actively reaching out to some local Hong Kong consortiums to jointly apply for stablecoin licenses.
According to incomplete statistics, dozens of teams have already begun forming to apply for stablecoin licenses in the Hong Kong market.
Racing to Capture the Trillion-Dollar Stablecoin Market
This time, whether the Hong Kong government's crypto industry can take off remains to be seen. Some relatively pessimistic crypto enthusiasts worry about whether this will be another case of "thunder and little rain".
This is because the Hong Kong government has been actively involved in the "digital currency" industry for over three years, but has yet to see large-scale industry development, with most digital currency businesses in Hong Kong unable to break even.
As early as 2022, under the impact of geopolitical tensions and the pandemic, the Hong Kong government actively explored new strategies and decided to participate in the Web3.0 industry from a compliant market perspective. Subsequently, the government released the "Policy Declaration on Hong Kong's Virtual Asset Development" (referred to as "Declaration 1.0"). At that time, Hong Kong became the global crypto center, with related forum events attracting Ethereum's founder Vitalik, creating a "hard-to-get ticket" phenomenon.
Afterward, the government launched compliant virtual asset fund license applications, compliant virtual asset exchange applications, and spot Bitcoin ETF products on the Hong Kong Stock Exchange to develop the "digital currency" industry.
However, these license businesses and ETF products are still in the scaling phase. After three years, while many institutions have obtained virtual asset fund management licenses, few have actually issued virtual asset-related products. The Hong Kong Securities and Futures Commission has issued 11 virtual asset exchange licenses over the past three years - yet these exchanges' core businesses remain in a loss-making state, with even top institutions like Hashkey Group's exchange showing unoptimistic revenue.
"Crypto products following the compliant route are quite challenging, whether for funds or exchanges," some industry insiders lamented. Several exchanges, including top exchange OKX, abandoned license applications in Hong Kong after multiple communications with regulatory authorities.
"But this time, it's completely different, with epoch-making significance. The release of 'Hong Kong Digital Asset Development Policy Declaration 2.0' (referred to as 'Declaration 2.0') and the 'Stablecoin Regulation' means that the crypto world has truly connected with traditional finance and industries," a business head at Hashkey exchange told Tencent News' Qianwang. Hashkey Group Chairman Xiao Feng also stated in multiple occasions that the implementation of 'Declaration 2.0' and 'Stablecoin Regulation' means Hong Kong is not just developing Web3.0, but truly linking Web3.0 with traditional finance.
On June 20th, the government's 'Declaration 2.0' established the "LEAP" framework, which stands for Legal and regulatory streamlining, Expanding the suite of tokenized products, Advancing use cases and cross-sectoral collaboration, and People and partnership development.
Under this framework, the government aims to promote the compliant, scalable, and global development of digital assets, specifically including: optimizing legal and regulatory frameworks, clarifying stablecoin licensing mechanisms, promoting Real World Assets (RWA) tokenization, and providing tax incentives for tokenized ETFs and digital asset funds.
Previously, virtual asset exchanges, virtual asset fund management, and spot ETF products were limited to blockchain-based assets like Bitcoin and Ethereum, without connecting to traditional systems.
Now, Hong Kong is transitioning from a crypto "experimental field" to genuine industry development through 'Declaration 2.0' and 'Stablecoin Regulation'.
Multiple participants involved in Hong Kong exchange license applications and tokenized product issuance told Tencent News' Qianwang that the government's determination is very firm, with the most important changes reflected in three aspects: incorporating stablecoins into regulation, viewing RWA tokenization as a key industry, and providing tax exemptions for tokenized ETFs and digital asset funds.
Now, stablecoins and tokenized products can truly connect with the real economy: the crypto world and traditional industries can now "flow" into each other.
"The prospects for stablecoins are very promising. This could be an opportunity to reshape the global monetary market, and the stablecoin market is developing rapidly," an industry insider who has long focused on the stablecoin market told Tencent News' Qianwang. He and his team are actively preparing to apply for Hong Kong stablecoin licenses.
Previously, on May 19, 2025, the US Senate passed the 'GENIUS Act', formally incorporating US dollar stablecoins into the "US dollar digitization" system - one reason for market excitement, as most current stablecoin products are pegged to the US dollar.
According to crypto data analysis platform OKG Research, the global stablecoin market is rapidly growing and expected to continue expanding in the coming years. In the first quarter of 2025, on-chain clearing stablecoin scale exceeded $3.7 trillion, with annual transaction volume expected to surpass $9.8 trillion. Simultaneously, stablecoin market value is approaching $250 billion, growing over 22 times in five years.
OKG Research data shows that with global stablecoin legislation accelerating, the global stablecoin market supply is expected to reach $3 trillion by 2030, with annual transaction volume exceeding $100 trillion. In an optimistic scenario, OKG Research predicts global stablecoin market supply could reach $3 trillion by 2030, with annual transaction volume surpassing $100 trillion.
Regarding stablecoin payment application scenarios that the Hong Kong government is particularly concerned about, OKG Research data indicates that in 2024, stablecoin payment annual settlement volume will reach $50.8 billion, accounting for 7.3% of the global personal cross-border remittance market, maintaining over 60% year-on-year growth for two consecutive years.
Many industry insiders revealed that the final number of stablecoin licenses in Hong Kong will not exceed 10, with "many becoming runners-up". Based on previous virtual asset exchange application experiences, annual expenditure for preparing stablecoin license regulatory framework design and implementation is at least 200 million Hong Kong dollars. Even after obtaining a license, breaking even might take 1-2 years.
This means teams wanting to participate in stablecoin license applications in Hong Kong will need an initial investment of at least 200-400 million Hong Kong dollars if selected in the first batch.
Although dozens of teams are rushing to apply for stablecoin licenses, obtaining one in Hong Kong is not easy. Based on past experience and the government's approval pace, the first batch of stablecoin license institutions might appear as early as December 2025.
The time for newcomers and "old money" to get ahead is less than half a year.
