Race for Hong Kong Stablecoin Licenses Shakes Markets

The upcoming issuance of stablecoin licenses in Hong Kong has created intense competition and turmoil in China’s stock market, as investors speculate on which companies will emerge as leaders in the region’s digital currency movement. Only two to four licenses are expected to be awarded in the initial phase, leading to significant uncertainty and sharp fluctuations in the stock prices of companies perceived as potential license recipients. This limited issuance has triggered a new wave of rivalry between private enterprises and state-owned firms, both of which are aggressively preparing to secure a foothold in this nascent industry[para. 1][para. 2][para. 3].

In anticipation of the new regulatory regime, which begins accepting applications on August 1, the stocks of prominent contenders such as Sinodata Co. Ltd. and Shenzhen Kingdom Sci-Tech Co. Ltd. dropped to their daily 10% lower limit, the maximum allowed in mainland China. Both companies had been previously regarded as prime candidates for licensure, with Sinodata’s shares nearly doubling to a five-year high after collaborating on Ant Group’s stablecoin project. Similarly, Kingdom Sci-Tech’s stock surged dramatically following its joint venture with JD.com’s technology arm, reaching its highest level since 2020[para. 3][para. 5].

The new Stablecoins Bill is set to provide a comprehensive legal framework for fiat-backed digital tokens in Hong Kong. According to sources familiar with regulatory developments, around 50 to 60 entities—including major tech corporations, financial institutions, and Chinese state-owned enterprises—are expected to vie for these highly-coveted licenses[para. 6]. Christopher Hui, the city’s Financial Secretary, confirmed that only a “single-digit” number of licenses will be granted in 2024[para. 7].

Three consortiums were chosen by the Hong Kong Monetary Authority (HKMA) for sandbox testing ahead of official licensing: RD Technologies Ltd.; Jingdong Coinlink Technology Hong Kong Ltd. (JD.com subsidiary); and a consortium led by Standard Chartered Bank (Hong Kong), Animoca Brands, and Hong Kong Telecommunications (HKT). Each group brings sector-specific strengths, such as JD.com’s technology pedigree, Standard Chartered’s traditional banking expertise, and RD Technologies’ crypto-native innovation under former HKMA chief Norman Chan[para. 8][para. 9]. However, participation in the sandbox does not guarantee a license; all applicants must reapply and undergo the same rigorous evaluation process according to HKMA CEO Eddie Yue[para. 10].

Tech heavyweights are also on the move. Ant International, the Singapore-based arm of Ant Group, and Hong Kong-based Ant Digital Technologies have both announced their intention to apply as soon as the application portal opens. Ant International is collaborating with Deutsche Bank to streamline Euro-Asia payments using stablecoins and tokenized deposits, targeting a 90% reduction in costs and nearly instantaneous settlements. Meanwhile, Ant Digital seeks to tokenize real-world assets and develop secure, compliant digital trading platforms centered on stablecoins[para. 11][para. 12][para. 13].

State-owned enterprises are also eyeing the sector, motivated by recent high-level policy meetings and city-level initiatives encouraging blockchain integration in foreign trade. Institutions such as Bank of China (Hong Kong), Citic Group, China Everbright Bank, and PetroChina are reportedly exploring applications, aiming to leverage stablecoin infrastructure to fuel cross-border business growth. Bank of China (Hong Kong) is particularly seen as a strong contender, having established a dedicated stablecoin team and explored partnerships, though some potential joint bids may have been set aside due to differing strategic priorities[para. 14][para. 15][para. 16][para. 17][para. 18][para. 19][para. 20][para. 21].