Bank of China Hong Kong Shares Rise Following Stablecoin Licensing Rumors

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Shares of the Bank of China Hong Kong holdings increased by 6.7% to HKD 37.58 on September 1, following reports that the branch of the Chinese state bank was going to apply for a stablecoin issuer license under Hong Kong’s new regulatory framework.

Hong Kong introduced its fiat-referenced stablecoin licensing regime on August 1 under the Stablecoins Ordinance, requiring issuers to secure approval from the Hong Kong Monetary Authority (HKMA) to operate in the territory. Any company carrying on a regulated stablecoin activity, as defined by the Ordinance, is required to obtain a license from the HKMA.

According to the Hong Kong Economic Journal, Bank of China Hong Kong has expressed interest in applying and is actively preparing to become a stablecoin issuer. 

While mainland China maintains a strict ban on crypto-related activities, Hong Kong’s more open regulatory stance presents a contrast, allowing it to act as a hub for digital asset innovation under its autonomous regulatory framework.

A wide range of players have expressed interest in applying for a license, including Chinese tech giants like Ant Group and JD.com, who envision leveraging stablecoins for smoother cross-border payments.

However, the HKMA and the Securities and Futures Commission (SFC) earlier warned against speculation: 

The HKMA emphasises that an indication of interest or application for a stablecoin licence, and the HKMA’s communication with the interested entities are just part of the licensing process. ... [We] highlight the need to stay vigilant in these frenetic situations. This heightened volatility in share prices can lead to irrational decisions, thereby exposing investors to undue risks.