Hong Kong maintains stablecoin plan despite Chinese pressure.

• Hong Kong issues licenses for stablecoins in March.
• China maintains strict ban on cryptocurrencies.
• HKMA reviews 36 stablecoin applications

Hong Kong Determined to structure its stablecoin market, even in the face of Beijing's historical reservations about cryptocurrencies, the Hong Kong Monetary Authority (HKMA) has indicated that it may announce the first round of licenses for issuers as early as March, consolidating a new chapter for the local digital asset sector.

“We expect that by March we can make a decision,” said Eddie Yue, executive director of the HKMA, during a meeting at the Legislative Council on February 2nd. According to him, the regulator is examining an initial group of 36 applications for the issuance of stablecoins, following the entry into force of the Stablecoin Act approved in May and officially implemented in August.

The legislation establishes that any entity issuing stablecoins in the territory, or pegging these assets to the Hong Kong dollar, must obtain formal authorization. The measure is seen as an attempt to create a regulated environment for digital assets without directly confronting the restrictive stance of the Chinese central government.

Experts believe that the Hong Kong move functions more as a controlled test than a structural change in Beijing's policy. Jordan Wain, head of policy consulting at Chainalysis, highlighted that stablecoins already account for more than half the value of transactions recorded directly on blockchains, making them "fundamental to the crypto ecosystem."

Among the potential use cases cited by the HKMA are cross-border payments and tokenized deposit systems for international banks. Companies interested in the licensing regime claim that stablecoins pegged to the Hong Kong dollar could enable "faster refunds, more agile international payments, and more transparent exchange rates."

Despite this, the political context imposes clear limits. Beijing has maintained a total ban on cryptocurrency transactions since 2021, a measure motivated by concerns about volatility, illicit activities, and control of capital flows. Recent reports indicate that Chinese regulators have expressed discomfort with Hong Kong's plan, especially given the risk of expanding the circulation of digital assets beyond the reach of central regulation.

Monique Taylor, from the University of Helsinki, assessed that “Stablecoins challenge [Beijing's] state control over money, payments, and capital flows, and therefore do not fit well into the Chinese state-centric monetary governance model, which prioritizes supervision and internal financial stability.”

In addition to internal concerns, there are also fears related to the predominance of dollar-backed stablecoins, such as USDT and USDC. "The Chinese monetary system has recognized that dollar-backed stablecoins risk reinforcing the dominance of the US dollar," Taylor stated.

According to analysts, Hong Kong seeks to use its autonomy under the "one country, two systems" principle to demonstrate that stablecoins can operate under strict supervision, preserving room for innovation in cryptocurrencies and Web 3-related initiatives, without breaking with the broader guidelines set by Beijing.