Hong Kong’s upcoming stablecoin licensing framework, with the first batch of licenses expected from the HKMA in early 2026, is predicted by CGS International to favor major local banks, particularly those with strong connections to exporters.
The report suggests that the HKMA will likely prioritize how applicants, especially those with CNH-pegged stablecoins, can facilitate cross-border payments for trade, particularly with Belt and Road nations, having received 36 formal applications by the end of September.
While the new regime is expected to have little immediate financial impact on traditional banks, CGS International cautioned that a widespread shift of funds by users into stablecoins that offer returns could eventually reduce banks’ income from deposits and wealth management.
On a positive note, banks that become stablecoin issuers or custodians could generate revenue from managing the required reserve assets that back the tokens.
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