Hong Kong to license fiat-backed stablecoin issuers in March, expand crypto regulation

Hong Kong will issue its first licenses to fiat-backed stablecoin issuers in March, with the licensing framework now fully established, Financial Secretary Paul Chan announced during the 2026-27 Budget on February 25, BlockBeats reports. The city will submit legislation this year to establish a licensing regime for virtual asset traders and custodial service providers, expanding regulatory oversight beyond existing cryptocurrency exchanges and stablecoins to include over-the-counter and other digital asset trading activities. The SFC will take measures to enhance liquidity in the local crypto asset market and open more products to professional investors, including crypto asset margin financing and derivatives trading arrangements, while setting up an "accelerator" mechanism to drive market innovation. The government will issue guidelines clarifying that company creditor registers can be maintained on blockchain and will explore the use of electronic signatures in the issuance of tokenized bonds; the HKMA will continue upgrading its wholesale central bank digital currency pilot platform, EnsembleTX, to enhance 7×24-hour real-time value settlement and cross-border interoperability standards, and Hong Kong plans to amend the Inland Revenue Ordinance over the next two years to implement the OECD's Crypto-Asset Reporting Framework (CARF) and the updated Common Reporting Standard (CRS).