Standard Chartered Bank Hong Kong (SCBHK), Animoca Brands, and HKT have announced a joint venture to develop a stablecoin backed by the Hong Kong dollar. The initiative aims to introduce a regulated digital asset that ensures price stability and compliance with financial regulations. The move aligns with the increasing interest in stablecoins as a means to facilitate secure and efficient transactions. If approved, the stablecoin could serve as a bridge between traditional finance and digital assets, offering businesses and individuals a new payment option. The companies bring their respective expertise to the project, potentially enhancing the adoption and reliability of the stablecoin.
Similar efforts have been made in other regions, with various financial institutions exploring regulated stablecoins. In the past, central banks and private companies have experimented with digital currencies to improve transaction efficiency and financial accessibility. Regulatory concerns have often been a key challenge, as authorities seek to balance innovation with financial stability. The HKMA has been proactive in developing a legal framework for stablecoin issuance, differentiating this initiative from previous attempts. Compared to earlier digital currency projects, this venture involves established financial institutions, which may contribute to increased trust and acceptance.
What is the purpose of the joint venture?
The joint venture seeks to obtain licensing under the new regulatory framework set by the Hong Kong Monetary Authority (HKMA). The companies involved will combine their strengths to ensure compliance with regulatory requirements while delivering a stablecoin designed for various financial applications. The stablecoin aims to facilitate both domestic and cross-border transactions, providing an alternative payment method that integrates with existing financial systems. If successful, the initiative could position Hong Kong as a leader in regulated digital asset issuance.
How will the stablecoin function?
The stablecoin will be backed by reserves in Hong Kong dollars to maintain its value. Standard Chartered will provide banking infrastructure and governance, while Animoca Brands will contribute expertise in blockchain and Web3 technologies. HKT, with its experience in mobile payments, will support integration into digital wallets. These combined efforts are expected to create a stable digital currency suited for institutional and individual use. The project also aligns with broader efforts to develop financial markets through blockchain and tokenized assets.
The three companies have already collaborated in an HKMA stablecoin sandbox initiative launched in July. This program allowed them to explore how stablecoins could enhance financial services and digital payments. The lessons learned from this initiative may contribute to the development of a practical and compliant stablecoin solution. Additionally, regulatory approval will be necessary before full-scale implementation. The companies believe that a stablecoin backed by a major currency can improve liquidity in financial markets while reducing the risks associated with unregulated digital assets.
SCBHK, Animoca Brands, and HKT emphasized their commitment to financial innovation and regulatory compliance.
“By leveraging the bank’s and our partners’ core strengths, we aim to launch a stablecoin that can be used securely by institutions and individuals across a wide range of use cases,” said Mary Huen, CEO of Hong Kong and Greater China & North Asia, Standard Chartered.
The companies aim to ensure that the stablecoin meets all necessary regulatory standards before introducing it to the market.
As regulatory frameworks for stablecoins evolve, financial institutions continue to explore their role in digital finance. While many unregulated stablecoins have faced scrutiny, compliance-focused initiatives like this could gain wider acceptance. The collaboration among a major banking institution, a blockchain technology company, and a telecommunications provider highlights the increasing convergence of traditional finance and digital assets. If the license is granted, the stablecoin could serve as a regulated alternative for payments and financial transactions in Hong Kong. The outcome of this initiative may influence other financial hubs considering similar regulated digital currencies.
