Declining Interest in Stablecoins in Hong Kong
A recent report by Caixin highlights the diminishing enthusiasm for stablecoins in Hong Kong as the region finalizes its regulatory framework for their issuance. A source familiar with the situation has conveyed that the primary use case for these stablecoins targets non-financial entities involved in cross-border transactions.
Regulatory Challenges and Industry Implications
This focus may lead some prospective applicants to reconsider their participation, especially given the stringent requirement to “verify the identity of each holder”. This regulatory challenge suggests major players, including well-known platforms like JD.com and Ant Group, could struggle to secure a position in the initial round of licensing.
Collaborations and Potential Opportunities
In related developments, CITIC Group, through its subsidiary CITIC International based in Hong Kong, is actively collaborating with various institutions to secure one of the first stablecoin licenses. Interestingly, industry experts point out that Bank of China Hong Kong stands out among Hong Kong’s note-issuing banks.
Should it decide to venture into stablecoin issuance, its established presence would provide a significant advantage and potentially enhance confidence among regulators across both regions.
