Stablecoin Issuer Licence

01 / BUSINESS SCOPE

Business Scope and Application Value

As at November 3, 2026, Hong Kong has implemented a statutory licensing regime for issuers of fiat-referenced stablecoins, centred on full reserves, redemption at par, sound governance and anti-money laundering controls. A licence is not a general-purpose pass for crypto-asset business. This article is prepared for Tang Shangyong (Drew) of Rengangyongsheng (Hong Kong) Limited to explain; regulatory facts and original sources remain attributable to the relevant official issuing bodies. [1] [2] [3]

• Within the scope of the licence authorisation and its conditions, the holder may lawfully conduct specified stablecoin issuance business and discuss arrangements with banks, merchants or distributors as a regulated entity. Holding a licence does not constitute a government guarantee, nor does it automatically confer permission to conduct other financial activities or operate in any jurisdiction.[1] [2]
• Adequate reserves, asset segregation and par redemption arrangements provide a verifiable holder-protection framework for payment and settlement products. Their commercial value lies in reducing concerns about the transparency of the issuer’s operations, not in guaranteeing that the token’s price will always equal par on every trading venue or that there is no risk of loss. [2, Sections 3.4 to 3.5] [3]
• Practical use cases such as cross-border payments, payments to local merchants and tokenised-asset settlement may be explored. The HKMA has introduced the relevant plans of the first licensees, but projects must still address customer demand, distribution partnerships and cross-border legality. Industry aspirations must not be presented as income or market share that an applicant is certain to obtain. [6] [9]
• A single licensee may plan to issue more than one type of specified stablecoin, but it should discuss any new type with the HKMA beforehand and demonstrate that its resources and risk management are adequate to support the expansion. A separate reserve pool and disclosure arrangements must be established for each type. One licence does not permit unlimited expansion into new types of stablecoin or unlimited growth in scale. [2, section 3.4] [3, section 4.2]

02 / ENTRY REQUIREMENTS

Entry Conditions and Core Requirements

• First determine whether the asset in substance is a specified stablecoin. The current scope covers stablecoins that maintain a stable value by reference entirely to one or more official currencies; it is not limited to Hong Kong dollars. The name, location of the blockchain, or use of an algorithm cannot replace analysis of the statutory definition and the facts of the business.[2, sections 2.1 to 2.5]
• The applicant is generally required to be a company incorporated in Hong Kong under the Companies Ordinance. Recognised institutions incorporated overseas are subject to a separate local registration exemption. An ordinary overseas fintech company cannot qualify as an applicant merely by setting up a liaison office, nor can an individual directly apply for an issuer licence. [2, section 3.2]
• Submit a genuine, specific and sustainable business plan explaining the payment or settlement scenarios, customer sources, partners and revenue model, and demonstrating the ability to execute it. Meeting the minimum criteria is only a starting point; the HKMA also places importance on practical utility, risk experience and compliance with Hong Kong and relevant overseas laws and regulations. [2, section 3.9] [7]
• Each stablecoin class must have a separate reserve pool. At all times, the market value of its assets must be no less than the total nominal value of that class of stablecoins in circulation, with an appropriate additional buffer retained for risk. Capital, customer subscription funds and reserve assets must not be conflated. Stablecoins that are frozen but may be unfrozen must also remain fully backed.[3, section 2.2]
• Reserve assets must be of high quality and highly liquid, with very low investment risk. The formal guidance lists cash, bank deposits with a term not exceeding three months, and qualifying short-term bonds, among others. Real estate, ordinary corporate bonds or other crypto-assets cannot automatically be treated as eligible reserves, and redemption capacity must not be sacrificed in pursuit of yield.[3, section 2.3]
• Reserves should, in principle, be denominated in the reference currency; a multi-currency basket should maintain the corresponding proportions. A currency mismatch requires the prior written approval of the Monetary Authority, together with an explanation of the reasons and risk mitigation measures. The linked exchange rate between the Hong Kong dollar and the US dollar does not allow the two currencies’ reserves to be substituted for each other at the issuer’s discretion. [2, section 3.4] [3, section 2.4]
• Establish an effective trust arrangement to segregate reserves from the issuer and other reserve pools, and prevent recourse by the issuer’s other creditors. An independent trustee or declaration of trust may be considered, but an independent legal opinion must establish the legal effect. Custody should be provided by a licensed bank or another asset custodian under an arrangement accepted by the HKMA.[3, section 2.5]
• All holders must have the right to redeem at par, together with rights to the disposal of reserves and to claim any shortfall if the issuer becomes insolvent. Valid requests should be processed as soon as possible and, unless otherwise approved, within one business day after the day the request is received. Unreasonable fees or unduly onerous conditions must not be imposed. [2, section 3.5] [3, section 3.3]
• Implement risk governance and three lines of defence proportionate to the scale of the business, covering credit, liquidity, market, technology, operational, third-party and reputational risks, and establish incident response and recovery and exit arrangements. The focus should be on effective controls in practice and the retention of evidence, not merely assembling a number of compliance manuals. [3, Chapter 6]
• Establish institutional policies for money laundering and terrorist financing risk assessment, customer due diligence, sanctions screening, on-chain monitoring and suspicious transaction reporting. Unless the HKMA is satisfied that alternative controls are effective, the identity of each holder must be verified by the issuer, an appropriately regulated institution or a reliable third party. Do not promote anonymous circulation without identification.[4, Chapters 2, 4 and 5]
• An issuer must not pay or permit the payment of interest or similar returns linked to the holding period, par value or market value. Gains and losses from reserve investments are borne by the issuer. Promotional rewards require separate review; restrictions on paying interest must not be circumvented by labelling them as points, rebates or third-party arrangements.[2, Section 3.13] [3, Section 2.6]
• A non-authorised institution must obtain the Monetary Authority’s consent before carrying on any business other than licensed stablecoin activities, and must assess resource use and conflicts of interest. For distribution, verify that the offeror is qualified to make the permitted offer. Cross-border issuance or distribution must also comply with local law; a Hong Kong licence is not a global authorisation. [2, sections 2.10 and 3.10] [3, section 3.4]

03 / PEOPLE & GOVERNANCE

Shareholders, directors and compliance personnel

• A non-authorised institution licensee must appoint a chief executive officer and at least one alternate chief executive officer, and obtain consent in accordance with the statutory procedures. The relevant chief executive officer must meet the usual Hong Kong residence requirement. A nominal consultant cannot be treated as a complete management team, nor should the alternate arrangement be described as optional.[2, section 7.2.13 and Annex A]
• An authorised institution should separately appoint a stablecoin manager, with the HKMA’s consent, to be responsible for the relevant business. The consent requirements under the Stablecoins Ordinance for its directors, chief executive and controllers differ from those for non-authorised institutions, but banking regulation must still be observed. A stablecoin manager is not a uniform role that every non-bank issuer must establish.[2, Section 3.6 and Annex A]
• The board should have sufficient members with appropriate skills to provide effective checks and balances and make decisions. For non-authorised institutions, the HKMA generally expects at least one-third of the members to be independent non-executive directors. This is a formal regulatory expectation and cannot be replaced by the minimum director configuration required for company incorporation.[3, Section 7.1]
• Directors, senior management and controllers must be fit and proper. The assessment covers integrity, relevant competence, regulatory and criminal records, financial soundness, time commitment and conflicts of interest. Prepare complete CVs and explanations of background matters. A particular certificate, uniform examination or fixed number of years of experience must not be presented as a statutory threshold applicable to every role. [2, Annex A]
• The HKMA generally expects senior management and key personnel to be based in Hong Kong. The applicant should explain how business, finance, reserves, technology, risk and compliance responsibilities will be discharged, and provide sufficient experience and resources; there is no single official minimum headcount applicable to all issuers.[2, section 3.6] [3, Chapter 7]
• A management-level Compliance Officer and a sufficiently senior Money Laundering Reporting Officer must be appointed. The latter is responsible for internal suspicious transaction reporting and liaison with the Joint Financial Intelligence Unit. Depending on the size of the institution, one person may perform both functions, but must have sufficient expertise, authority and resources; a merely nominal dual appointment is not enough. [4, sections 3.4 to 3.5 and note 4]
• The risk and compliance functions must be independent of front-line business. Internal audit should report directly to the board of directors or its committee; compliance and internal audit cannot substitute for one another. If group or external services are used, you must demonstrate that the alternative arrangements are effective. Outsourcing business activities does not transfer the board’s or licensee’s ultimate responsibility.[3, sections 6.2 and 7.1]

04 / CAPITAL & PREMISES

Capital and business address requirements

Financial resources and sources of funds

Non-authorized institutions must continuously maintain at least HKD 25 million in paid-up share capital, or the prescribed equivalent in another currency and other equivalent financial resources approved by the Monetary Authority, and liquid net assets supported by sufficient equity funding. The HKMA may impose higher requirements on a case-by-case basis. Authorized institutions are subject to banking capital regulation, and reserve assets must be fully backed separately. [2, section 3.3] [3, chapter 5]

Statutory share capital, net assets, liquid capital and other financial resources are not the same concept. Capital is not a government fee or consultancy fee, and must not be conflated with client assets or reserve funds.

Hong Kong Business Address and Substantive Operations

• The application must specify the principal place of business in Hong Kong, a correspondence address and an email address, and must clearly identify where actual management and regulatory liaison will take place. The verified licensing guidance sets no uniform minimum office area or rent. A registered-office or mail-receiving address alone does not demonstrate substantive management and operational capability. [2, sections 3.6 and 5.5]
• The premises and systems arrangements should support segregation of access rights, confidentiality of information, audit trails and secure operations, particularly for procedures involving minting, destruction and private-key management. Arrangements should be designed according to the risks of the business. The website should not claim that every applicant must lease an office of a particular grade, set up a counter or install identical security equipment. [3, chapters 6 and 8]
• Information and accounting systems may be hosted outside Hong Kong, provided the HKMA and authorised persons can access the information and conduct on-site or off-site examinations. Cloud services and outsourcing arrangements outside Hong Kong require an assessment of local law, data access and business continuity risks. Supplier confidentiality terms must not prevent regulatory examinations. [3, Sections 6.6 and 8.1]
• Business and technology recovery locations should be sufficiently distant from the primary location to reduce the risk that the same incident affects both primary and backup facilities, and should be included in continuity plans and exercises. The authorities assess recovery capabilities on a risk basis; there is no single requirement applicable to every project regarding server location, data-centre area or a fixed separation distance in kilometres.[3, section 6.8]

05 / APPLICATION DOSSIER

Application Document Checklist

• Prepare the application form, the board resolution supporting the application and the articles of association in accordance with Annex B to the official licensing guidance, and submit the certificate of incorporation, allotment details, business registration and relevant statutory registers. Verify requirements for certified copies and applicable exceptions for authorised institutions. Do not mistake general company incorporation documents for a complete set of licence application materials.[2, Annex B, items 1, 4 to 6]
• Prepare a business plan covering three years and beyond, as well as business and financial forecasts for the next three years. Explain the issuance scale, sources of funds, customer demand, costs and stress scenarios. The figures must reconcile with one another and be reasonably supported; a standard forecast template provided by a consultant should not be treated as a business plan accepted by the HKMA. [2, Annex B, items 2 to 3]
• Submit the shareholding structure, the relevant applications for controllers, and the latest audited financial statements of corporate controllers. Submit the applicant’s audited information for the preceding three financial years as required by the applicable rules. For a newly established subsidiary, provide the parent company’s information as specified in the checklist; do not fabricate historical audit records that do not exist.[2, Annex B, items 7–11]
• Submit the management committee structure, organisation chart, staffing plan and description of roles and responsibilities, together with application forms for the chief executive, directors and, where applicable, stablecoin managers, and explain manager appointment and ongoing fit-and-proper controls. CVs, job responsibilities and the business plan must be consistent; providing only a few identity documents is not sufficient.[2, Annex B, items 12 to 14]
• Prepare a reserve management policy and proposed trust and custody arrangements, explaining eligible assets, valuation, reconciliation, liquidity, account segregation and investment limits. Subsequently submit formal trust documents, custody and material third-party contracts, a capital attestation report and an independent legal opinion as required by the HKMA.[2, Annex B, items 10, 15, 21 and 25 to 28]
• Submit policies and procedures for issuance, redemption, distribution and risk management, covering technology, operations, reputation, money laundering, business continuity and exit, and provide an institutional money laundering risk assessment. The technical description should adequately connect on-chain operations with bank fund flows; a blockchain name and marketing demonstration alone are not sufficient.[2, Annex B, items 16 to 19 and 23]
• Prepare contractual terms for holders and a white paper for each type of stablecoin, clearly explaining reserves, redemption fees, timeframes, legal rights, underlying technology and risks. The terms must take account of holders who are not direct customers and exceptional events. Public-facing documents must not contradict the capabilities of the actual systems. [2, Annex B, items 20 and 22] [3, section 3.6]
• Items 1 to 23 of Annex B are formal application materials. Items 24 to 29 are to be provided as required by the licensing group, and cover independent assessments, capital verification, legal opinions, contracts and smart-contract audits. An independent assessment report is not invariably required on the day the application is filed; the specific scope and delivery timing should be discussed with the HKMA.[2, Section 4.5 and Annex B]

06 / APPLICATION ROADMAP

Application process and required time

There is no fixed approval period applicable to all applications, nor any assurance that meeting the capital threshold will result in a licence. Progress depends on the business model, completeness of materials, risk controls and independent assessment. The end of August 2025 and the end of September 2025 were dates for initial communication and priority consideration arrangements, not permanent deadlines; no predetermined commitment has been made regarding the timing of subsequent licence grants. [2, chapter 4] [5] [7]

1. The first step is to complete a regulatory-scope and feasibility analysis, confirming the reference currency, place of issuance, target users and distribution chain, and identifying whether banking, stored value facility or securities laws are also relevant. Assess the permissions for issuance separately from those for trading, custody, remittance and other activities to avoid applying for the wrong permissions. [2, Chapters 2 and section 3.10]
2. The second step is to contact the HKMA Licensing Team at stablecoin_licensing@hkma.gov.hk and introduce the shareholders’ background, proposed use cases and state of preparation. The preliminary discussion is intended to clarify regulatory expectations and reduce the risk of filing too early. It is not an in-principle approval, a reservation of a place or a guarantee that a formal application will be accepted for processing. [1] [2, Section 4.2]
3. As a third step, put in place the Hong Kong applicant entity, governance team, capital, reserve custody and technology compliance arrangements, and prepare the Appendix B materials. If the parent company conducts regulated financial or digital asset business overseas, coordinate with the home-country regulator first; the HKMA may seek the views of the relevant regulatory authorities.[2, section 4.3 and Appendix B]
4. Step four is to formally submit the designated forms and supporting materials, ensuring consistency across ownership, financial, technical and business documents. The HKMA may request supplementary information. Failure to provide required documents by the deadline specified in a notice, or an inability to resolve material issues, may result in the application no longer being processed or being refused. Filing does not itself confer a right to a place in the queue or to obtain a licence.[2, Sections 4.4 to 4.5]
5. In step five, respond to substantive reviews, management interviews and independent assessment requirements, and demonstrate that policies have been implemented as system and operational controls. The official stablecoin advisory committee is composed of senior HKMA officers and makes licensing recommendations. Do not claim that external advisers can participate in regulatory voting or guarantee approval through their connections. [2, sections 3.6 and 4.5]
6. Step 6 is subject to the HKMA’s written decision, effective date and licence conditions; being licensed does not necessarily mean that full operations can commence immediately. After completing applicable system testing, risk controls and staffing arrangements, conduct business in accordance with the approved plan, and incorporate ongoing disclosure, audit, reporting and contingency arrangements into day-to-day management.[2, Section 4.6] [6] [9]

07 / ACQUISITION & CHANGES

Acquisitions, Changes to Shareholders and Directors, and Completion

• An acquisition should distinguish between acquiring shares in a licensed company and purchasing assets or technology. A company’s existing licence must not be treated as an item that can be transferred separately for the buyer’s use. If the transaction results in the buyer becoming a controller, the applicable regulatory procedures must be completed first, with completion arranged in accordance with the transaction terms thereafter. It must not be promised that buying a shell company will automatically confer the right to operate. [2, Annex A, paragraphs 9–12]
• A proposed majority shareholder controller and, where applicable, a minority shareholder controller must submit a clear and detailed acquisition intention and future business plan. The HKMA will assess their track record and financial capacity, and the impact of the plan on the issuer’s long-term stability. A low acquisition price, financial strength or a recommendation from existing shareholders does not in itself mean that the person will be approved. [2, Annex A, paragraphs 11 to 12]
• Due diligence should examine whether reserves actually exist and are effectively segregated, the amount in circulation, redemption liabilities, trust and custody agreements, audit attestations and historical reconciliation discrepancies. In particular, confirm whether any stablecoins remain subject to safeguarding obligations despite being frozen, and whether there have been unreported incidents or unauthorised issuance. Do not check only the company registry and screenshots of licences. [2, sections 3.4–3.5] [3, Chapter 2]
• Assess whether directors, senior executives and key personnel can remain after completion, and whether bank accounts, third-party contracts, system private keys and intellectual property can continue to be used lawfully. If the acquisition involves a team change, system migration or expansion of supported currencies, make the relevant consents, notifications, assessments and client communications conditions precedent.[2, Annex A] [3, Chapters 4 and 6 to 8]
• As of this review, the public register lists Anchorpoint Financial Limited and The Hongkong and Shanghai Banking Corporation Limited, both effective from April 10, 2026. Being listed on the register does not mean that the relevant institution is available for sale. The official sources specify neither a uniform acquisition price nor an acquisition approval timeline; claims of ready-made licences for sale or promises of rapid transfer should not be fabricated. [6] [10]

Shareholders, Directors and Other Material Changes

• A non-authorised institution proposing a change of chief executive, alternate chief executive or director should first verify and complete the HKMA consent procedure. A stablecoin manager at an authorised institution must also follow the applicable procedure. A person’s departure or loss of Hong Kong residency or fit-and-proper status cannot be dealt with simply by passing an internal company resolution and filing documents afterwards.[2, Sections 3.6 and 7.2.13]
• Becoming or changing a controller involves specific statutory consent and regulatory review. Before arranging a share sale or purchase, group restructuring, changes to voting rights or a change in effective control, first determine which rules apply. Authorized institutions are also subject to banking regulation; their exemption must not be interpreted to mean that changes involving any bank shareholder require no regulatory action. [2, Appendix A, paragraphs 3 and 9 to 12]
• Any change to the principal place of business, correspondence address or email address in Hong Kong must be notified to the HKMA in writing within seven days after the date of the change. Details of any material change in circumstances that has occurred or is likely to occur and that affects the minimum criteria, licence conditions or business must be submitted as soon as practicable in accordance with the Ordinance.[2, sections 5.5 to 5.6]
• The appointment, departure or change in responsibilities of a manager appointed for a designated matter must be notified to the HKMA, with details provided, within 14 days after the relevant event. This manager notification regime is not the same as the regime requiring prior consent for directors or chief executives, and the same notification deadline cannot be applied to all personnel changes. [2, Annex A, paragraphs 17–18] [3, section 7.2.7]
• A proposed addition of stablecoin types, change in business model, or proposal by a non-authorised institution to conduct other business concurrently should be discussed with the HKMA in advance, and any applicable consent procedures must be followed. For an additional type, it must be demonstrated that the addition will not adversely affect the existing issuance, with separate reserves, disclosure and controls established rather than simply applying all existing arrangements for the original type. [3, Chapter 4]
• The HKMA should be notified before a white paper is first published or materially amended. If there is a material change to the trust arrangements or the legal rights of redemption, an updated independent legal opinion should be submitted. Matters such as a mismatch in the currencies of the reserves also require prior written approval; a general notification of a material matter cannot substitute for the specific approval.[3, Sections 2.4, 2.5, 3.3 and 8.2]

08 / ONGOING COMPLIANCE

Post-approval maintenance and ongoing responsibilities

• Continue to meet the applicable minimum criteria and licence conditions, and maintain adequate capital, liquidity and personnel resources. Regulatory requirements apply not only during annual inspections; the HKMA may conduct on-site inspections and off-site reviews and require reports from professionals. Serious deficiencies may lead to restrictions on business, suspension or revocation of the licence. [2, Chapters 1 and 5 to 7]
• The initial licence fee must be paid within 14 days after the licence effective date. Thereafter, it must be paid on or before each annual anniversary of that date. The amount should be verified against Schedule 3 to the Ordinance and current amendments. An annual payment is not a fresh licence application, and consultancy fees, system fees and audit fees are not regulatory charges. [2, section 5.1]
• Prepare daily statements showing the par value of circulating stablecoins and the market value and composition of reserves, and provide them on request. Unless otherwise agreed by the HKMA, report to the HKMA weekly and update the relevant information on the website. Report immediately if reserves are insufficient, a material breach occurs, or an unreconciled discrepancy remains; do not wait for the next weekly report.[3, section 2.7]
• Appoint an independent external auditor accepted by the HKMA to perform reserve attestations at the frequency accepted by the HKMA. Submit and publish the report within one month after the last business day of the attestation period. Do not assume a uniform monthly or quarterly frequency; the annual financial audit must also cover the relevant reserve assets. [3, Section 2.7]
• Submit audited financial statements prepared in accordance with the applicable accounting standards to the HKMA annually, generally within four months after the end of the financial year, covering the stablecoin reserves. The ongoing budget should include compliance, custody, cybersecurity and exit costs; the capital threshold should not be treated as the entire operating budget.[3, sections 5 and 8.2]
• Review the reserve management policy at least quarterly, and the issuance, redemption and distribution policies at least annually. Material amendments must be approved by the board, and actual compliance should be audited regularly. Assess third-party capability and incident recovery arrangements regularly, and implement remedial actions promptly; merely changing the cover-page date of a document is not sufficient. [3, Chapters 2.7, 3.6 and 6]
• Conduct ongoing customer due diligence, on-chain transaction and wallet-address monitoring, sanctions screening, applicable Travel Rule checks, and suspicious transaction reporting. Measures must also be taken on a risk-sensitive basis for self-hosted wallets and holders who are not direct customers; open blockchains or decentralised technology do not exempt licensees from anti-money laundering responsibilities.[4, Chapters 4 to 8]
• Anti-money laundering transaction records should generally be retained for at least 5 years after completion of the transaction. Customer due diligence records must be retained throughout the business relationship and for at least 5 years after it ends. The HKMA may require a longer retention period for a specific investigation. Different records should be handled separately; the outdated guidance stating a blanket 6-year period should not be copied. [4, Chapter 9]
• Clearly display the licence number in relevant advertising materials and on consumer interfaces of software supporting licensed activities. Publish the white paper, redemption arrangements and complaint channels on the website. Under regulatory guidance, complaint records must be retained for at least 2 years from receipt of the complaint. Information must be kept confidential, complaints must be investigated independently, and recurring issues must be addressed. [2, section 5.2] [3, Chapter 8]
• If it appears likely that obligations cannot be met, the licensee is insolvent or it is about to suspend payments, the HKMA must be notified immediately; this obligation is not limited to financial matters. Resources for recovery and orderly exit must be maintained on an ongoing basis. If a voluntary exit is proposed, redemptions of circulating stablecoins and unclaimed reserves must first be properly addressed; simply shutting down the website is not sufficient. [2, sections 5.4 and 7.2.18] [3, section 6.8]

09 / FREQUENTLY ASKED

Frequently asked questions

10 / OFFICIAL REFERENCES

Official references and information verification

Information compilation date:3 November 2026The regulatory websites below are used to verify applicable laws, the latest forms, fees and registration status. Primary legislation, current requirements of the competent authorities and case-specific decisions take precedence.

Prepared by Rengangyongsheng (Hong Kong) Limited; professional explanation provided by Business Manager Tang Shangyong (Drew). This does not constitute legal, tax or investment advice for any specific case.