Hong Kong will start granting stablecoin issuer licenses in March: Reuters

Core Viewpoint - Hong Kong's financial authority plans to issue a limited number of stablecoin issuer licenses in March, indicating a cautious approach to the growing stablecoin market [1][3]. Group 1: Regulatory Developments - The Hong Kong Monetary Authority (HKMA) is set to grant a "very small number" of stablecoin issuer licenses in March, as stated by CEO Eddie Yue during a Legislative Council meeting [1]. - The review process for stablecoin issuer applications is nearing completion, suggesting that regulatory frameworks are being established to support the stablecoin market [3]. Group 2: Market Potential - Stablecoins, currently a $300 billion asset class, are projected to grow to a market size between $1.9 trillion and $4 trillion, highlighting significant growth potential in the sector [3]. - Last year, stablecoins facilitated transactions worth $35 trillion on blockchain networks, indicating their increasing adoption and importance in the financial ecosystem [2]. Group 3: Approval Criteria - The criteria for stablecoin issuer license approval will focus on risk management, anti-money laundering measures, and the backing assets of the stablecoins, ensuring a robust regulatory framework [4]. - Licensed issuers will be required to comply with local regulations for cross-border activities, with potential for future mutual recognition agreements with other jurisdictions [4].