Final · Applies to VASPs, Brokers, Banks, Stablecoin issuers, Retail
The SFC and HKMA issued parallel circulars for platforms, brokers and banks dealing in stablecoins issued by HKMA-licensed issuers. These stablecoins are exempt from the token liquidity and index tests, the crypto knowledge test for stablecoin-only clients, and client exposure limits. Intermediaries may also partner with the licensed issuer directly and custody clients' stablecoins with it.
Why it matters: Hong Kong now treats a licensed stablecoin as a payment instrument for distribution purposes, which is what issuers need for retail reach.
The SFC circular covers licensed platforms and licensed corporations. The HKMA circular covers registered institutions (banks) and was written jointly. Both apply only to “Relevant Stablecoins”: specified stablecoins issued by an HKMA-licensed issuer under its licence (SFC para 2).
For these stablecoins:
The liquidity and index requirements for retail-tradable tokens do not apply, because HKMA oversight of reserves and redemption addresses the risks they target (SFC para 4).
Firms serving clients who trade only licensed stablecoins need not test those clients’ crypto knowledge, and must consider the client’s use case instead (SFC para 6).
Licensed stablecoin holdings are left out of the client’s crypto exposure limit (SFC para 7).
Licensed stablecoins count as non-complex products, but suitability applies to any recommendation, and commission rebates must not drive it (SFC para 8).
Brokers and banks may partner with the licensed issuer directly (SFC para 9) and receive or withdraw client stablecoins through segregated accounts held with the issuer (SFC para 11).
Firms must notify the SFC before admitting or removing a licensed stablecoin but do not need prior approval (SFC para 12).
Two changes reach beyond stablecoins. Brokers and banks serving retail clients may now use platforms that are licensed for professional investors only, provided retail clients only trade tokens admitted for retail on that platform (SFC para 10). Banks offering stablecoin-only dealing no longer need to be registered for Type 1 dealing in securities (HKMA para 2).
Implications
The circulars remove the onboarding steps that made buying a stablecoin at a Hong Kong bank or broker look like buying a volatile token: the knowledge test, the exposure cap and the per-token approval. A bank can now offer a licensed Hong Kong dollar stablecoin to any client with a use case, from the issuer directly.
The professional-investor-platform change widens the choice of venues for brokers and could matter more over time than the stablecoin carve-outs.
The concessions only cover stablecoins from HKMA licensees. Offshore stablecoins stay under the full crypto rules.
Elsewhere in Asia
Singapore’s draft stablecoin law proposes that stablecoins outside its framework be treated as ordinary digital payment tokens. That is the same line Hong Kong draws here, drawn in legislation instead of intermediary circulars.
What to watch
Which banks and brokers add stablecoin-only services once the first licensed stablecoin launches, and whether any platform lists it for retail trading.