- Hong Kong’s new stablecoin law takes effect August 1, boosting crypto oversight.
- JD.com and Yuanbi lead major applicants for limited Hong Kong licenses.
- Only big players expected to win stablecoin permits amid fierce competition.
Hong Kong is ready to launch a new law for stablecoins. The Hong Kong Stablecoin Ordinance will officially take effect on August 1, 2025. This law is an important step for the city’s growing crypto and finance market.
JD.com, Yuanbi Among Major Firms Eyeing Hong Kong Stablecoin Permits
When the law comes into force, HKMA (Hong Kong Monetary Authority) will begin receiving applications to obtain a license. But there is a twist. It is believed that initially only a small number of licenses will be granted. Actually, some insiders claim that the number of licenses to be issued could be a single digit.
In the meantime, over 40 companies are already preparing to make applications. This is an indication of heavy interest by large players in China in stablecoins. Some of the largest banks and internet companies in China are the main applicants. As an example, JD.com, Standard Chartered, and Yuanbi already announced their intention to apply.
Reports in the industry indicate that most companies are turning to law firms. They also desire to ensure that their applications are in line with the stringent regulations. The market is quite intense. Smaller companies are at very low probability to have their license approved due to the small amount of licenses which will be granted.
Stablecoins are increasingly gaining popularity. Most individuals view them as a mediator between the conventional money and digital assets. They can be used to trade, to lend or to move money across the border. This is a new law that will stimulate the market even higher in Hong Kong.
But other professionals think that stablecoins have boundaries. Qiao Yide, a vice president of the Shanghai Development Research Foundation, comments that people are to remain realistic. He remarks stablecoins are not likely to significantly reduce the cost of cross-border payments as popularly imagined. According to some studies, the actual cost may remain near to 1%.
Only Big Players Likely to Win HK Stablecoin Permits
Even so, many companies want to enter the stablecoin business. Ant International and Ant Digits are also the big names to get interested. They are working out on how to scale up their services through stablecoins.
Alex Zuo, a senior vice president at Cobo, says demand for licenses is very high. He indicates that over 40 businesses have made or are making applications. However, he cautions that licenses will probably be granted to established major players.
Some firms are also recruiting fresh talents in this new market. Tech giants in China are hunting blockchain professionals. They intend that this will aid in securing a license when applications go live in August.
So why is everyone so eager? There are two main reasons. This happens because of two reasons. To begin with, businesses interested in settling international transfers would like to take advantage of stablecoins. They require them to handle quick and affordable transactions on behalf of their customers. Second, big internet corporations have an opportunity to mint and distribute their stablecoins.
But it is not all the companies that are serious. Other smaller companies only capitalize on the stablecoin theme to gain some attraction. They just declare projects but they lack projects. According to industry insiders, these companies are interested in increasing their share price or getting hype.
Stablecoins have become a mainstream component of the crypto economy today, with a market capitalization of $250 billion. The global governments have since sprung to action to establish categorical regulations.
As the launch date is set to August 1, everyone is keeping their eyes open on who will receive the first licenses. At present, the race has already started. Hong Kong is keen to be seen as leading the charge on crypto finance that is safe and regulated.
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