Despite Mainland China Ban, Why Hong Kong Is Pressing Ahead With Crypto Licensing in March

▲ Despite Mainland China’s Ban, Hong Kong Presses Ahead… Why It Is Moving Forward with Crypto Licenses in March / Gemini-generated image

Despite mainland China’s steadfast stance on a comprehensive cryptocurrency ban, Hong Kong is accelerating efforts to establish itself as an independent digital finance hub by pressing ahead with the issuance of cryptocurrency licenses in March, amid the BRICS-led push for de-dollarization.

According to cryptocurrency-focused outlet Watcher.Guru on February 13 (local time), Eddie Yue, Chief Executive of the Hong Kong Monetary Authority (HKMA), reaffirmed the March licensing schedule during a Legislative Council meeting on the 2nd. Authorities have currently received 36 stablecoin license applications and are conducting detailed evaluations. To ensure prudence and financial stability, only a very limited number of licenses will be granted in the initial phase.

Hong Kong’s move is taking place within a regulatory framework that is entirely separate from mainland China’s controls. Following the passage of the Stablecoin Ordinance in May and the implementation of the regulatory framework in August, major financial and industry leaders—including Standard Chartered, Animoca Brands, and Ant Group’s digital technology division—have rushed to apply for licenses, demonstrating strong interest. In contrast, Chinese authorities reaffirmed their firm opposition after imposing a cryptocurrency ban in 2021, with eight regulatory bodies recently reiterating the prohibition.

Monique Taylor of the University of Helsinki analyzed that China’s opposition extends beyond mere financial regulation and is closely tied to geopolitical tensions. She noted that stablecoins could weaken state control over payment systems and capital flows, potentially clashing with China’s state-centric monetary governance model. In particular, Beijing is concerned that the proliferation of dollar-based stablecoins could undermine BRICS nations’ de-dollarization efforts and instead reinforce the dominance of the U.S. dollar.

In fact, BRICS countries have accelerated de-dollarization by settling more than 85% of their mutual trade in local currencies this year. Russian President Vladimir Putin recently stated, “We are not fighting the dollar; they are restricting its use, so we are seeking alternatives,” signaling the bloc’s intent to reshape the global monetary system. Amid this global power competition surrounding the U.S. dollar, Hong Kong’s digital finance sector stands at a complex crossroads.

Accordingly, Hong Kong authorities are walking a fine line between innovation and risk. Financial Secretary Paul Chan described Hong Kong’s strategy as a “responsible and sustainable” approach, noting that March approvals will be granted only on a limited basis to firms that demonstrate strong anti-money laundering controls and robust reserve mechanisms. Hong Kong’s decision to position itself as a bridge between traditional finance and digital assets through this March licensing initiative is expected to serve as a significant precedent for the global regulated digital asset market.

Disclaimer: This article is for investment reference purposes only, and no responsibility is taken for investment losses incurred based on it. The above content should be interpreted solely for informational purposes.