Hong Kong-listed shares of the Bank of China rose sharply after local reports said its Hong Kong branch is preparing to apply for a stablecoin issuer license. The stock jumped 6.7%, trading near HKD 37.58 late Monday as investors reacted to the licensing rumours.
The Hong Kong Economic Journal reported the bank has set up a dedicated task force to explore stablecoin issuance. The Bank of China did not provide a comment to reporters, though it told investors on a recent results call that it is researching digital asset applications and related risk-management approaches.
Hong Kong rolled out its stablecoin licensing framework on August 1, requiring issuers to obtain approval from the HKMA. The rules impose strict standards covering reserve management, redemption guarantees, client-fund segregation, anti-money-laundering controls, disclosure and operator vetting — measures designed to protect users and preserve market integrity. The move follows global regulatory momentum, including recent U.S. federal stablecoin legislation.
Major financial institutions and Chinese tech firms have signalled interest in the city’s regime. Standard Chartered and payments-focused units tied to JD.com and Ant Financial are reported to be weighing applications for licenses that could support cross-border services. JD founder Richard Liu has said stablecoins could cut business-to-business payment costs before reaching consumer use.
Industry voices point to efficiency gains: as First Digital CEO Vincent Chok notes, blockchain can speed settlement and reduce intermediary fees, an advantage in emerging-market corridors. But regulators have urged caution — the HKMA and SFC warned that share moves driven by application rumours may be misleading, underscoring the significant uncertainty around preliminary plans.
Why it matters: Approval could accelerate institutional stablecoin adoption and reshape cross-border payments, but investors should be wary of speculation while applications and regulatory vetting remain unresolved.
Source: Decrypt. Read the original coverage for full details.