Detailed Explanation of Hong Kong's 36 Stablecoin License Applications: Who Will Ultimately Leap Over the Dragon Gate?

On October 1st, the Hong Kong Monetary Authority disclosed to the public that as of September 31st, a total of 36 banks, tech giants, and others have submitted applications for stablecoin licenses and entered the review process by the Monetary Authority. The first batch of license holders is expected to be announced in early 2026. According to public channel information, the number of license holders in the first batch will be small, and the Monetary Authority is expected to limit it to a single-digit range (referencing the model used by the Hong Kong Securities and Futures Commission when it first issued VATP licenses to exchanges, it would not be surprising if only one or two licenses were issued), which also means that the vast majority of applicants will be unable to "leap over the dragon gate."

Today, Sister Sa's team will talk to everyone about what impact the stablecoin license application dispute may have on the industry.

36 exchanges have achieved initial success, half of them have not yet succeeded in their ventures.

On October 1st, the Hong Kong Monetary Authority disclosed that there were 36 entities undergoing the review process, but did not release a specific list. The main reason for not disclosing it is that the Monetary Authority has previously emphasized: "Expressing intentions or submitting stablecoin license applications, as well as communication between the Monetary Authority and relevant institutions, is merely part of the application process and does not constitute approval for any institution, nor does it imply any recognition of the prospects for obtaining a license." Therefore, in order to avoid inappropriate publicity by certain entities that may lead to public misunderstanding, the Monetary Authority will not disclose the list.

Since the issuance of the Hong Kong "Stablecoin Ordinance" and the clarification of the license application conditions, the Sa Jie team has communicated with regulatory authorities and several informants, and has repeatedly emphasized in previous articles: based on the positioning of stablecoins as important financial infrastructure, only large-scale, widely-operating, and well-qualified giants in the finance, technology, and retail industries are likely to "land" in the early stages of license issuance. In short, this is not a game that ordinary companies can play.

The news announced by the Hong Kong Monetary Authority has indeed confirmed our speculation.

On September 1st, not long ago, the Monetary Authority disclosed that as of August this year, it had received a total of 77 applications for stablecoin licenses. The entities submitting the application materials include: banks, technology companies, securities/asset management/investment firms, e-commerce, payment institutions, and web3 unicorns, among others.

In just a short month, 77 firms (at least) have directly "halved" to 36. Coupled with the previous statement from the Monetary Authority in September: "We have gradually arranged meetings with institutions that have expressed intentions to apply for stablecoin licenses, hoping that the communication during this period will help these institutions seriously assess the necessity and maturity of their stablecoin issuance plans, and thus decide whether to submit a formal application." It can be inferred that, at the initial screening stage, the Monetary Authority may have already "discouraged" half of the applicants, including many well-known giants that initially declared their intention to apply for stablecoins with great momentum. The intensity of the competition for stablecoin licenses and the high compliance requirements can be seen as a glimpse.

This inevitably reminds the Sa Jie team of the rumors in the market that the blockchain company under a certain East and the digital technology company under a certain Li both withdrew from the first batch of licensing applications due to high compliance requirements and the immaturity of the application timing. Looking at it now, the news may not be unfounded, and taking a step back for the time being may not be an unwise move. After all, sharpening the knife does not delay the work of cutting firewood; since the first batch of licenses was originally few, it might be better to stand by and see how others are eating this crab.

First batch of stablecoin licenses, who has a better chance?

As mentioned before, the Hong Kong Monetary Authority, based on its consistent prudent approach, has issued a limited number of stablecoin licenses, determining them to be in single digits. So, among the many applicants, who has a better chance?

The Sa Jie team believes that the first batch of licensed institutions is likely to be large state-owned banks or a consortium of banks with retail/technology giants.

According to the information disclosed by the Monetary Authority, we know that the 36 applicants for stablecoin licenses are mainly banks, technology giants, financial institutions, and some web3 companies. This structure also aligns with the market's expectations for initial applicants, as the three major players in the stablecoin sandbox have already sufficiently demonstrated the preferences of Hong Kong regulators.

In fact, according to the "Stablecoin Regulation", the application standards for the Hong Kong stablecoin license are not actually difficult, and even a moderately capable company can achieve them with some effort. The specific summary by the Sajia team is as follows:

If we only look at the paper strength, the Sa sister team believes that not to mention the 36 companies, even the other 41 companies that were advised to withdraw definitely have the strength to meet the above requirements. However, the unfortunate thing is that many game rules are not simply written on paper.

The reason why the Sa Sister team is optimistic about banks is based on the fundamental skills of traditional financial institutions in anti-money laundering and 24-hour security monitoring construction. This is mainly because stablecoins, in the eyes of regulators, are not a "product" but an important financial infrastructure related to the financial future of Hong Kong and even our country. This means that the issuance of licensed stablecoins must be primarily based on "compliant issuance" rather than "decentralized issuance and autonomous circulation." Therefore, technology giants like a certain East and a certain Li, although they are not lacking in technology or market, cannot compare with traditional financial institutions such as banks in terms of financial security, especially in massive and detailed KYC, anti-money laundering and anti-terrorism financing, and around-the-clock monitoring.

At the same time, the relevant financial regulatory authority is, after all, the "mother" of traditional financial institutions like banks, and is very familiar with each bank, possessing a good foundation of trust. The tech giants still have a bit of the "other people's child" flavor, and it is not an easy task to persuade the financial regulatory authority in the short term. After all, financial security is a significant matter, and it takes time to see people's true intentions.

Of course, it's not without "shortcuts" for tech giants to quickly enter the market, and a consortium is a feasible option. Taking the consortium of Standard Chartered Bank (Hong Kong) Limited + Animoca Brands + HKT as an example, the three companies have successfully entered the Hong Kong stablecoin sandbox for testing.

Standard Chartered goes without saying, being one of the three major note-issuing banks in Hong Kong, it has no shortcomings in anti-money laundering compliance. Hong Kong telecommunications partners should be quite familiar, as it is a well-known telecommunications infrastructure provider in Hong Kong, covering nearly 90% of local households with basic services such as local phone and broadband access. The public may not be very familiar with the Anxi Group, but it is actually a company that started with IP mobile games, gaining fame through early collaborations with many globally recognized IPs. It entered the Web3 blockchain gaming space around 20 years ago, when NFTs and GameFi were at their peak, and has made a significant impact. Such a three-in-one group, balancing financial security, market, technology, users, and other factors favored by regulators, makes it unsurprising that it is the first entity to enter the stablecoin sandbox.

written at the end

Finally, the Sa Sister team also wants to clarify two concepts for partners: stablecoin license and stablecoin sandbox.

Many partners mistakenly believe that entering the stablecoin sandbox is a prerequisite for obtaining a license, or that entering the sandbox guarantees a license. In fact, both of these views are incorrect. The Hong Kong Monetary Authority positions the sandbox as a "dialogue window between early-stage regulation and the market for stablecoin development," in simple terms, similar to a guinea pig. Therefore, the Monetary Authority has made it clear that there is no direct causal relationship between the sandbox and the license; entering the sandbox does not mean obtaining a license, and it does not even mean that the probability of obtaining a license is greater. Ultimately, it depends on whose final solution can comply + maintain compliance.

Of course, the three companies in the sandbox definitely have a first-mover advantage, as others are still in the scheme design phase, and the coins from these three companies have already been released for testing. It is likely that they will have a significant "place" in the future.