HKMA implements stablecoin ordinance as mainland China sticks to crypto ban decree.
Hong Kong and China have announced a collaboration to test blockchain links for credit verification. According to reports, the Hong Kong Monetary Authority (HKMA) and the People’s Bank of China (PBoC) have agreed to formalize the Greater Bay Area Cross-Border Credit Information Sharing pilot.
The pilot program, which was launched in 2024, is expected to strengthen data connectivity between Hong Kong and mainland China across the Guangdong-Hong Kong-Macao region. In a report by local media Caixin, Howard Lee, HKMA Deputy Chief Executive, confirmed that the program will move from trial to official operation after successful tests. Seven retail banks, including HSBC, Standard Chartered, Bank of China (Hong Kong), and three credit-reference agencies, are expected to participate.
Hong Kong and China banks announce blockchain links test
The system presently runs active blockchain nodes in both Hong Kong and Shenzhen, creating a two-way outlet for verified credit data. The pilot program is expected to incorporate the Shenzhen-Hong Kong Cross-Border Data Verification Platform, a system that uses blockchain technology to secure and validate data exchanges. To facilitate encrypted data transmission among institutions, one blockchain node has been set up in Hong Kong, and another has been set up in Shenzhen.
Under the system, individuals and companies are allowed to obtain data from registered providers and upload it to the verification platform. An encryption algorithm is then used to generate a 64-bit hash code representing the data. The other party across the border is expected to match the code to confirm its authenticity. This enables legitimate data sharing while removing any capability for information or data to be tampered with or accessed by unauthorized parties.
The structure of the platform provides compliance with privacy and data protection features that users appreciate. In addition, it also helps to maintain the integrity of information on the blockchain, especially financials. In addition, it requires manual verification, protecting data so that only people with matching codes across the border can access encrypted information. Finally, it also allows faster processing of credit data between Hong Kong and Shenzhen.
HKMA announces stablecoin regulatory framework
Separately, the HKMA has announced that its stablecoin regulatory framework, which was enacted on August 1, 2025, has shown considerable progress. According to the body, it had seen more than 36 companies apply for licenses, after about 77 forms expressed their interest in the framework. The first batches of approvals are likely to be received in early 2026. Applicants include banks, securities firms, payment providers, and e-commerce platforms.
According to the agency, firms seeking the license must follow several guidelines, including full Know Your Customer (KYC) identification for all stablecoin transactions. This move is in line with Basel banking standards to facilitate participation by financial institutions. Standard Chartered, a participant in the Hong Kong stablecoin sandbox, has confirmed plans to apply for a license through a joint venture with Hong Kong Telecom (HKT), Animoca Brands, and Anchorpoint Financial.
The HKMA spokesperson stated that the agency is expected to review all the submitted materials and conduct approvals with the Stablecoin Ordinance and relevant regulatory requirements. The HKMA mentioned that the bar has been set high and only a limited number of applicants will be granted licenses in the initial phase. The HKMA had initially asked that they fulfill all necessary conditions to apply for the licensing, listing out conditions that they must satisfy to gain approval.
Meanwhile, mainland China has continued to enforce its 2021 crypto ban that was established by the PBoC in its September 24, 2021, notice. In the notice, the premier financial institution announced that all digital asset transactions were illegal. The ban ended China’s dominance in mining and exchange activities, and four years later, the country is still relying on that legal foundation, allowing only experiments through regional programs that they can monitor.
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