On January 21, 2026, Mr. Chan Mao-po, Financial Secretary of Hong Kong, delivered a speech at the Davos Forum, emphasizing that Hong Kong, as an international financial center, will adopt proactive and prudent strategies to develop digital assets, and promote the responsible and sustainable development of the market based on the principle of “same activity, same risk, same regulation.”
On April 10, 2026, the Hong Kong Monetary Authority officially announced the first batch of “Stablecoin Issuer Licenses,” which were obtained by The Hongkong and Shanghai Banking Corporation Limited and Anchorstone Financial Technology Co., Ltd. (led by Standard Chartered Bank, Animoca Brands, and Hong Kong Telecom). This marks a new stage in Hong Kong’s fiat stablecoin regulatory system, which aims to protect users and regulate issuance activities. In addition, the HKSAR government is also actively promoting tokenization development and has issued three batches of tokenized green bonds, totaling approximately $2.10B; at the same time, it has launched a regulatory sandbox to encourage application innovation.
On the funding side, real-world currencies can exist in token form. Different institutions or individuals in different financial ecosystems have different understandings and applications of currency. First, tokens pegged 1:1 to fiat currencies, such as stablecoins issued by private institutions and running on public chains, are one of the most discussed token forms in the current market. On the other hand, central bank digital currencies (CBDC) issued by central banks can be regarded as fiat currency tokens running in a centralized system. Secondly, according to the theory of money supply, in addition to cash in circulation (M0), M1 (narrow money) includes current deposits held by enterprises and individuals, and M2 (broad money) includes time deposits. Tokenizing deposits allows them to be used as on-chain payment tools.
How to understand the development of RWA on the funding side? We can refer to the graphics mentioned in previous papers by the Bank for International Settlements (BIS) for understanding. Among all the classifications, we focus on the intersection of Electronic and Universally accessible. We will find that the three directions covered by the on-chain funding side are all covered: 1) CBCC, corresponding to central bank digital currency; 2) bank deposit, corresponding to deposit tokens; 3) Cryptocurrency, including stablecoins.
Central Bank Digital Currency (CBDC) is a digital legal tender issued by the national central bank, which is a digital extension of traditional banknotes and coins. It exists in electronic form, is usually pegged one-to-one with the value of fiat currency, and is directly controlled and supervised by the central bank. CBDC aims to improve payment efficiency, promote financial inclusion, and reduce cash usage. Its potential advantages include enhancing the effectiveness of monetary policy, reducing the risk of fraud and money laundering, and facilitating cross-border payments. However, there are also challenges such as privacy protection, cybersecurity, and financial system stability. Many countries around the world, including China, Sweden, and the Bahamas, are conducting CBDC pilot studies and maintaining international cooperation. The development of central bank digital currency represents a shift in the form of currency and will have a profound impact on the future financial system and economic behavior.
Deposit tokens are essentially still bank liabilities, which are the bank’s tokenization of customers’ fiat currency deposits (such as current deposits and time deposits) on a distributed ledger at a 1:1 ratio. It is not a cryptocurrency, but represents the bank’s debt to depositors, so its risks and legal status are the same as traditional deposits. It is worth noting that a key advantage of deposit tokens over stablecoins is that they can generate interest. Stablecoin issuers usually earn income from their reserve assets, but this income is generally not passed on to token holders. In contrast, deposit tokens can pay holders the interest generated by their bank deposits, which is significantly attractive to institutions with large balances, such as cryptocurrency trading companies that use stablecoins for fund transfers and as collateral.
A stablecoin is a cryptocurrency pegged to a fiat currency or other asset, and its main purpose is to maintain value stability. According to the form of collateral, stablecoins can be divided into four main types: 1) fiat-collateralized stablecoins, which use fiat currency as collateral; 2) cryptocurrency-collateralized stablecoins, which use other cryptocurrencies as collateral; 3) algorithmic stablecoins, which do not rely on external collateral and control the amount of circulation through algorithms; 4) commodity-collateralized stablecoins, which are based on physical commodities (such as gold, oil, etc.).
We can not only analyze the evolution of the on-chain world from the two dimensions of technology and regulation, but also grasp the current market stage from the two ends of funds and assets. On the on-chain funding side, corresponding to stablecoins are the central bank digital currencies (CBDC) issued by various central banks. At the same time, taking Hong Kong as an example, EnsembleTX will continue to operate in 2026, laying a solid foundation for the next stage of innovation. Interbank settlement of tokenized deposit transactions will first be conducted through the Hong Kong Dollar Real Time Gross Settlement (RTGS) system, and the pilot environment will be gradually upgraded and optimized to support 24/7 settlement of tokenized central bank currency, promoting the continuous development of Hong Kong’s broader tokenized ecosystem.
On the on-chain asset side, as investment demand increasingly emphasizes the dimensions of space and time, asset classes with lower minimum purchase amounts and trading hours extended to 24/7 will be highly consistent with the characteristics of the on-chain funding side.
[China Merchants International Wealth Management]
Hong Kong’s Stablecoin Licensing and On-Chain Funding Revolution: Market Implications for Crypto Investors
Hong Kong’s recent regulatory moves represent a paradigm shift in digital asset markets, signaling the formal integration of blockchain technology into traditional financial infrastructure. The issuance of the first batch of stablecoin licenses to HSBC and Anchorstone Financial Technology – backed by Standard Chartered, Animoca Brands, and Hong Kong Telecom – is not merely a regulatory milestone but a strategic positioning in the global race for digital financial supremacy.
Regulatory Framework: From Proactive to Prudent
Hong Kong’s “same activity, same risk, same regulation” principle, articulated by Financial Secretary Chan Mao-po at Davos, establishes a sophisticated approach that avoids both the excessive caution stifling innovation in some jurisdictions and the regulatory vacuum that plagued earlier crypto markets. This balanced approach creates a fertile ground for institutional adoption while maintaining investor protection.
The licensing of established financial players rather than crypto-native issuers sends a clear signal: traditional finance is not entering crypto as outsiders but as architects of the future financial system. This positions Hong Kong as a bridge between legacy systems and blockchain innovation, potentially setting a global benchmark for other financial centers to follow.
Market Impact and Token Price Dynamics
The immediate market impact has been positive, with particularly strong performance from projects with Hong Kong connections. However, the deeper implications are more nuanced:
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Stablecoin Market Consolidation: With licensed institutions now competing in the stablecoin space, we expect market consolidation among unlicensed, smaller issuers. The licensed stablecoins may gain market share not through superior technology but through regulatory advantages and institutional trust, particularly for cross-border settlements and institutional treasury management.
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Tokenization Premium: Projects involved in Hong Kong’s tokenized ecosystem, particularly those related to the EnsembleTX platform and tokenized green bonds, are experiencing a “tokenization premium” as investors anticipate increased liquidity and institutional adoption. This premium is likely to persist throughout 2026 as more real-world assets are tokenized.
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CBDC-Stablecoin Nexus: The interplay between CBDCs and stablecoins is creating interesting market dynamics. While CBDCs represent state-backed digital money, privately issued stablecoins offer greater flexibility and privacy features. The market will likely bifurcate, with CBDCs dominating institutional and government transactions while licensed stablecoins maintain advantages in crypto-native applications and DeFi.
Strategic Opportunities for Investors
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Infrastructure Play: The development of 24/7 settlement infrastructure for tokenized central bank currency represents a significant opportunity. Projects enabling seamless integration between CBDCs and blockchain networks are positioned to capture substantial value as this infrastructure matures.
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Tokenized Asset Diversification: With Hong Kong having issued $2.10B in tokenized green bonds and plans to expand into other asset classes, investors should position for the tokenization of real-world assets (RWAs). Tokenized real estate, private equity, and commodities are likely to follow, creating new investment opportunities with fractional ownership and increased liquidity.
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Deposit Token Innovation: The tokenization of deposits represents a significant innovation over traditional stablecoins, offering interest-bearing capabilities. This could disrupt the current stablecoin market model where yield is concentrated with issuers rather than token holders. Investors should closely monitor early implementations of deposit tokens by licensed institutions.
Risks and Challenges
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Regulatory Arbitrage Erosion: As jurisdictions like Hong Kong establish clear frameworks, regulatory arbitrage opportunities diminish. This could impact projects that previously benefited from operating in regulatory gray areas.
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Institutional Capture: The dominance of established financial institutions in the new digital asset landscape could marginalize crypto-native projects, particularly those without the resources to meet stringent regulatory requirements.
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CBDC Competition: The rapid development of CBDCs could pose an existential threat to privately issued stablecoins, particularly in jurisdictions where CBDCs achieve widespread adoption. The competitive landscape will likely favor hybrid models that can interact with both CBDCs and traditional stablecoins.
Market Outlook for 2026-2027
The Hong Kong model is likely to be emulated by other financial centers, creating a patchwork of regulatory approaches globally. This fragmentation will create both challenges and opportunities for market participants:
- Short-term (2026): Continued growth in tokenization of traditional assets, with regulatory clarity driving institutional adoption
- Medium-term (2027): Emergence of hybrid financial products that bridge CBDCs and blockchain-native assets
- Long-term (2028+): Potential convergence toward a multi-tiered digital monetary system with CBDCs at the base, licensed stablecoins in the middle layer, and crypto-native assets at the application layer
For experienced crypto investors, the key takeaway is that the industry is transitioning from a Wild West frontier to a regulated, institutional ecosystem. While this reduces some of the speculative opportunities that characterized early crypto markets, it creates a more sustainable foundation for long-term value creation. The most successful projects will be those that can navigate the intersection of traditional finance and crypto innovation, leveraging regulatory clarity to build bridges rather than walled gardens.