Hong Kong is poised to issue its first stablecoin issuer licenses in early 2026, according to the Hong Kong Monetary Authority (HKMA), signaling a measured approach to regulating the city’s burgeoning digital asset market. The announcement, made during a Tuesday media briefing, comes as the city’s stablecoin bill is slated to take effect on August 1, 2025.

Initially, market expectations leaned toward licenses being granted within 2025, but the HKMA’s cautious timeline reflects its focus on ensuring regulatory rigor. Darryl Chan, HKMA’s deputy chief executive, noted that only a select few licenses will be issued in the initial batch, underscoring the authority’s prudent stance.

The passage of the stablecoin bill in May 2025 has already fueled significant investor enthusiasm, driving a surge in crypto-related stocks. Notably, shares of Guotai Junan International (1788.HK) skyrocketed 450% after the brokerage secured regulatory approval last month to offer cryptocurrency trading services in Hong Kong. This reflects the city’s ambition to cement its position as a global digital asset hub.

However, the HKMA has repeatedly cautioned against market exuberance surrounding stablecoins. In a Tuesday statement, the authority urged market participants to exercise restraint in public communications to avoid misleading statements or inflated expectations. As of now, no stablecoin licenses have been issued, and the HKMA is encouraging interested institutions to submit applications by August 31, 2025, to receive regulatory feedback.

Chan revealed that discussions with prospective issuers have primarily focused on stablecoins pegged to the Hong Kong dollar (HKD) and U.S. dollar (USD). For stablecoins backed by offshore yuan, issuers must clearly outline their use cases and reserve assets to meet regulatory standards.

Hong Kong’s measured yet progressive approach to stablecoin regulation highlights its balancing act between fostering innovation and mitigating risks in the fast-evolving digital asset landscape.