Hong Kong’s licensed stablecoins have entered the market, but their longer-term role remains unproven. Evan Auyang, Group President of Animoca Brands, argues that their significance lies in connecting Hong Kong dollar assets to global liquidity on public blockchains, rather than simply increasing the supply of digital money.

That ambition raises a question for banks and investors. As Hong Kong’s capital markets become more tokenised, which forms of digital money will institutions choose for settlement? Stablecoins are one option, alongside tokenised bank deposits and central bank money already being used in the city’s developing digital asset infrastructure.

The Stablecoins Ordinance took effect on 1 August 2025, and the Hong Kong Monetary Authority (HKMA) granted its first two issuer licences on 10 April 2026. The recipients were The Hongkong and Shanghai Banking Corporation (HSBC) and Anchorpoint Financial, a joint venture between Standard Chartered Bank (Hong Kong), Hong Kong Telecommunications (HKT) and Animoca Brands. Both licensees are bank-led.

Anchorpoint began a limited rollout of HKDAP, a Hong Kong dollar stablecoin, on 12 August 2026, initially for eligible institutions and professional investors through authorised distributors, with retail access possible from the end of 2026. Auyang spoke as a founding shareholder in Anchorpoint, not on behalf of the issuer, and declined to discuss its circulation or operating volumes.

Regulated distribution sets the pace

Regulated stablecoin distribution involves whitelisting, audits and the vetting of distributors.

Auyang compared Hong Kong’s model with Tether. “If you expected to move the speed of Tether, it’s not going to be what it is,” he said. “But it is a completely different product.”

Anchorpoint uses a business-to-business-to-consumer (B2B2C) model, under which authorised distributors verify customers and provide access through approved wallets. Beta distribution began through digital asset platforms HashKey and OSL in August, with five distributors enabling live beta access by the end of the month.

Standard Chartered Bank (Hong Kong) became the first bank distributor on 24 August. It was exploring institutional treasury, cross-border payments and tokenised fund settlement, with subscriptions and settlement for tokenised money-market funds planned for the fourth quarter.

The issuer also faces obligations under the Stablecoins Ordinance, including reserve segregation, attestations and know-your-customer (KYC) controls.

Stablecoins and tokenised deposits offer different claims

Auyang distinguished stablecoins from tokenised bank deposits by their credit risk rather than the technology used. Both could operate on private or public blockchains, he said, but tokenised deposits remained liabilities of the issuing bank and carried its credit risk.

Hong Kong-regulated stablecoins operating on public blockchains, by contrast, are backed one-to-one by reserve assets held under licensed custody arrangements and HKMA supervision, he said. Because banks use deposits to fund lending, Auyang argued that fully reserved stablecoins should offer better liquidity.

That advantage is not guaranteed. Stablecoin liquidity depends on redemption arrangements, market depth and institutional participation, while banks benefit from access to central bank liquidity facilities. Wider adoption could also affect bank funding if corporate customers shifted deposits into third-party stablecoins, although the effect would depend on where issuers held their reserves.

Banks are developing both forms of digital money. HSBC holds a stablecoin issuer licence and launched a Tokenised Deposit Service for corporate clients in Hong Kong in May 2025, initially allowing round-the-clock Hong Kong dollar and US dollar transfers between wallets held by the same client.

In November 2025, it completed a HK$3.8 million cross-bank tokenised deposit transfer for Ant International through EnsembleTX, the pilot phase of the HKMA’s Project Ensemble. The transaction showed that tokenised deposits could also support transfers between participating banks rather than remain confined to individual bank networks.

A pegged currency still needs its own settlement unit

Hong Kong dollar stablecoins face a market dominated by the US dollar. The Bank for International Settlements (BIS) reported that over 99% of stablecoin market value was US dollar-denominated.

Auyang nevertheless rejected the argument that the Hong Kong dollar’s peg made a local currency stablecoin redundant. Although prices might be quoted in US dollars by convention, he argued that markets would continue to need multiple settlement currencies as assets moved onto public blockchains, reflecting their links to different jurisdictions.

“The use of it is for Hong Kong dollar assets,” he said.

Hong Kong was the world’s leading IPO fundraising venue in 2025, raising $37.4 billion from 119 listings. Auyang described the city as “the capital window to all Chinese companies”, noting that not all would list in the US. As long as Hong Kong maintained its own capital markets, he argued, a Hong Kong dollar stablecoin connecting them to global liquidity would remain relevant. “It’s an infrastructure piece,” he said.

Anchorpoint has identified cross-border payments as a more immediate opportunity, with institutions potentially using regulated stablecoin currency pairs to transfer funds internationally. Another potential use case is settling tokenised investment products in Hong Kong dollars, including versions of products currently denominated in US dollars.

Cross-border use may run ahead of mutual recognition

Cross-border settlement raises the question of whether a stablecoin issued in one market can be used in another. The Monetary Authority of Singapore (MAS) published proposed legislative amendments on 1 September 2026 to implement its single-currency stablecoin framework, with consultation closing on 16 October. The proposals include licensing, reserve and redemption requirements, and possible recognition of foreign-issued stablecoins under comparable regulatory regimes, subject to supervisory cooperation.

Auyang considered Hong Kong and Singapore’s regulatory approaches broadly similar, but said their markets differed. Hong Kong was developing stablecoins, tokenised deposits and central bank digital currencies against the backdrop of mainland China’s much larger capital markets. Singapore, without a comparable hinterland, relied more on financial activity across Southeast Asia. He argued that these market differences mattered more than the regulatory ones.

Auyang cautioned that mutual recognition could also depend on geopolitical considerations, not just the similarity of regulatory frameworks. Issuers might therefore launch stablecoins in other currencies within their own jurisdictions before formal recognition was agreed.

For example, a Singapore issuer could offer a Hong Kong dollar stablecoin to support trade between the two markets, subject to licensing requirements. Auyang argued that cross-border payment and investment settlement could become more efficient without full mutual recognition, provided financial institutions were willing and permitted to hold the relevant stablecoins.

Capital-market adoption is the real test

Auyang’s longer-term vision extended beyond individual payments. He envisaged blockchain-based applications, much like Chinese super-apps, expanding access to payments, investments and other financial services. He did not expect traditional payment methods to disappear, but believed their use could decline as programmable money developed.

To assess Hong Kong’s progress, Auyang proposed looking beyond stablecoin issuance and transaction volumes to the proportion of capital-market activity taking place on public blockchains, compared with other markets. Public networks, he argued, offered access to global liquidity that private networks could not provide in the same way.

Hong Kong’s digital bond market is advancing, although settlement has so far relied on other forms of digital money. In November 2025, the government issued around HK$10.0 billion in digital green bonds across four currencies, introducing the option of settlement using tokenised central bank money in e-HKD and e-CNY. Its subsequent HK$20.0 billion offering in September 2026 also incorporated tokenised bank deposits for settlement of the Hong Kong dollar tranche. Neither offering established a role for stablecoins in settlement.

These developments show that capital-market tokenisation does not necessarily translate into stablecoin demand. For banks, custodians and brokers, the question is which digital settlement instruments and networks institutions choose as activity expands. The test for licensed stablecoins is how much of that activity they settle.