Hong Kong's financial secretary says upcoming stablecoin licensing offers competitive edge

Hong Kong's top financial official said the city's upcoming stablecoin regulations and role as an offshore yuan center have given it a strategic advantage as the global race to regulate digital assets intensifies.

Paul Chan, Hong Kong's financial secretary, said at a forum on Saturday that Hong Kong's legislature has passed a stablecoin bill that is expected to take effect on August 1 — which "will make Hong Kong one of the first jurisdictions in the world to establish a statutory regulatory framework for stablecoins."

Chan also noted that the city processes 80% of global offshore yuan transactions. "Strengthening Hong Kong's role as a global offshore renminbi hub is an important responsibility in aligning with national development strategies and a unique advantage for its future financial development," he said.

Chan's comments echoed the Chinese central bank's new policy announced last week. Pan Gongsheng, governor of the People's Bank of China, acknowledged that stablecoins and central bank digital currencies are reshaping global payment infrastructure. Pan also announced plans to establish an e-CNY international operation center in Shanghai to expand the Chinese yuan's global influence.

Hong Kong has been at the forefront of a global race to develop stablecoin legislation. In May, Hong Kong's Legislative Council passed a stablecoin bill, establishing a licensing regime for stablecoin issuers. Meanwhile, the U.S. Senate passed the GENIUS Act, a landmark stablecoin bill, advancing it to the House for further consideration.

Last year, the Hong Kong Monetary Authority, its de facto central bank, launched a sandbox for stablecoin issuers with participants including Standard Chartered Bank, Animoca Brands, Hong Kong Telecommunications, Jingdong Coinlink, and RD InnoTech.

Possibility of offshore yuan-pegged stablecoins

With stablecoins high on the global agenda, Jianguang Shen, Vice President of Chinese e-commerce giant JD.com, said at the Saturday forum that Hong Kong could develop stablecoins pegged to the offshore yuan, which would help the yuan secure a position in the "next generation of international currency competition," according to a report from local media outlet Wenweipo.

Lo Wai-kwok, a Hong Kong lawmaker, also held a press briefing last week, urging the authorities to promote the development of stablecoins pegged to the offshore yuan, local media HKTKWW reported.

Stablecoins are also emerging as a new battleground for Chinese e-commerce giants. JD Coinlink, a subsidiary of JD.com, recently tested a stablecoin pegged to the Hong Kong dollar, while Ant Group's international unit, which operates the Alipay platform, announced plans to apply for a license to issue stablecoins in Hong Kong.