Regulatory discussions surrounding stablecoins are gaining momentum on both sides of the Pacific, with key industry players engaging policymakers to shape the future of digital assets. In the United States, Tether is actively working with lawmakers on proposed stablecoin regulations, signaling a willingness to align with federal oversight while maintaining its dominant market position. Meanwhile, in Hong Kong, Standard Chartered, Animoca Brands, and Hong Kong Telecommunications (HKT) have announced plans to launch a Hong Kong dollar-backed stablecoin, seeking regulatory approval under the city’s evolving digital asset framework.
Standard Chartered, Animoca Brands, and HKT Partner for Hong Kong Dollar-Pegged Stablecoin
Standard Chartered Bank Hong Kong, Animoca Brands, and Hong Kong Telecommunications (HKT) have announced a strategic partnership to launch a Hong Kong dollar-backed stablecoin. This initiative, structured under a new joint venture, seeks to leverage the trio’s expertise in traditional banking, blockchain technology, and mobile payment systems to revolutionize digital transactions within the region and beyond.
The group intends to apply for a license from the Hong Kong Monetary Authority (HKMA) to ensure compliance with the city’s evolving regulatory framework for stablecoin issuance. This move is part of Hong Kong’s continued ambition to solidify its position as a global leader in digital asset innovation, competing directly with neighboring Singapore in the digital finance and cryptocurrency sectors.
Unlike most jurisdictions where central banks directly issue currency, Hong Kong operates under a unique monetary system where the Hong Kong dollar (HKD) is issued by three designated banks—HSBC, Bank of China (Hong Kong), and Standard Chartered—under the oversight of the HKMA.
Standard Chartered’s involvement in this stablecoin initiative is particularly notable, as it shows the bank’s longstanding role in Hong Kong’s monetary system. The British multinational has been actively engaged in stablecoin-related initiatives, including its participation in HKMA’s tokenized money pilot programs.
The collaboration brings together three distinct players, each contributing a unique expertise to the venture:
Standard Chartered Bank Hong Kong: A key issuer of Hong Kong’s fiat currency and a trusted financial institution with a deep understanding of traditional banking regulations and international financial markets.
Animoca Brands: A globally recognized blockchain company and venture capital firm, known for its investments in metaverse projects, non-fungible tokens (NFTs), and Web3 applications.
Hong Kong Telecommunications (HKT): A leading mobile payment and telecommunications provider, instrumental in expanding digital financial services and payment infrastructures across the region.
With this powerful alliance, the joint venture plans to explore various applications of stablecoin technology, including domestic and cross-border payments, integrating blockchain-based finance into everyday transactions, remittances, and digital commerce.
The announcement comes amid Hong Kong’s ongoing legislative efforts to establish a clear regulatory framework for stablecoins. The proposed Stablecoin Bill, which entered the Legislative Council on Dec. 6, 2024, and underwent its first reading on Dec. 18, 2024, seeks to require stablecoin issuers to obtain an HKMA license and adhere to reserve, audit, and price stability requirements.
If enacted, the bill will introduce a stringent licensing regime similar to the licensing framework imposed on cryptocurrency exchanges by the Securities and Futures Commission (SFC). This move is designed to ensure investor protection and financial stability while promoting the growth of the stablecoin sector in Hong Kong.
The three companies behind the new stablecoin initiative have already been active participants in Hong Kong’s stablecoin issuer sandbox since July 2024—a regulatory testing environment allowing financial institutions and tech companies to develop and refine their stablecoin models before full market deployment.
Other firms participating in the sandbox include:
Jingdong Coinlink Technology – Announced plans for its own Hong Kong dollar-pegged stablecoin in July 2024.
RD InnoTech – Partnered with HashKey Exchange to develop a compliant stablecoin under HKMA oversight.
The sandbox initiative has provided a controlled space for these companies to address compliance requirements while refining their stablecoin use cases.
Hong Kong’s Digital Asset Strategy and Competitive Edge
The launch of a Hong Kong dollar-backed stablecoin aligns with the city’s broader ambitions to position itself as a leading hub for digital assets, a vision that has intensified since the government’s pro-crypto regulatory shift in 2023.
Hong Kong has already taken significant steps toward integrating digital assets into mainstream finance, including:
Approving spot Bitcoin (BTC) and Ethereum (ETH) exchange-traded funds (ETFs) – One of the first jurisdictions in Asia to allow these crypto-based investment products.
Imposing a licensing regime for cryptocurrency exchanges – Ensuring greater transparency and regulatory compliance in the crypto industry.
Granting licenses to nine digital asset platforms, including HashKey, which secured its initial license in November 2022 and remained one of the only licensed exchanges in Hong Kong until late 2024.
With Standard Chartered, Animoca Brands, and HKT leading the charge, the launch of a Hong Kong dollar-backed stablecoin represents a pivotal development in the city’s digital finance strategy. As Hong Kong moves closer to finalizing its Stablecoin Bill, the venture stands at the forefront of an era where regulated digital currencies bridge the gap between traditional banking and blockchain-based finance.
If successful, this initiative could set a precedent for other financial hubs looking to integrate stablecoins into their economies while maintaining strict oversight and financial stability.
As Hong Kong strengthens its regulatory framework, the question remains: Will this new stablecoin accelerate Hong Kong’s leadership in the digital asset space, or will it face challenges in competing with global stablecoin giants like USDT and USDC? The coming months will determine how this bold initiative unfolds in the ever-evolving landscape of digital finance.
Tether Engages US Lawmakers in Stablecoin Policy Discussions Amid Regulatory Uncertainty
In other stablecoin news, Tether, the world’s largest stablecoin issuer, is reportedly engaging with US lawmakers to influence stablecoin regulations at the federal level. According to Fox Business journalist Eleanor Terrett, Tether is in discussions with key members of Congress, including Representatives Bryan Steil and French Hill, who introduced the STABLE Act of 2025 on Feb. 6.
The stablecoin industry has long operated in a regulatory gray area, with US lawmakers struggling to define the legal framework governing these digital assets. Tether’s involvement in shaping the STABLE Act marks a strategic shift for the company, signaling a willingness to comply with new regulations rather than risk exclusion from the US market.
Tether CEO Paolo Ardoino confirmed that the company is actively working with Congress to provide input on three separate stablecoin bills, including the STABLE Act introduced by Steil and Hill. These discussions are part of a broader effort by the company to remain compliant and continue operating within the US despite increasing regulatory scrutiny.
Ardoino emphasized that Tether has no intention of backing down, stating, ”We are not going to just throw in the towel and let Tether die just for the sake of not adapting to US legislation. But there is still a lot of uncertainty over what’s actually going to happen, and we want our voice to be heard in the legislative process.”
The STABLE Act of 2025 aims to introduce stricter regulatory oversight on stablecoin issuers, requiring them to adhere to enhanced transparency, reserve audits, and collateralization standards. Tether’s participation in these discussions suggests that the company is preparing to align with these requirements while advocating for policies that protect its market position.
One of the key regulatory hurdles for Tether under the new legislative proposals is the requirement for regular reserve audits by a US-based accounting firm. This provision is designed to ensure that stablecoin issuers maintain one-to-one asset backing for their digital tokens, reducing risks of depegging events and liquidity crises.
Tether has long faced scrutiny over the transparency of its reserves. Critics have raised concerns about whether the company holds sufficient collateral to back all issued USDT tokens. While Tether has published attestations regarding its reserves, regulators and industry analysts have consistently called for more rigorous, independent audits.
If the STABLE Act and other stablecoin bills pass, Tether would be required to disclose its reserves on a monthly basis, potentially through a top-tier US accounting firm. This shift could increase confidence in the stablecoin market but would also place greater compliance burdens on issuers.
Tether’s engagement with lawmakers comes at a time when the US government is increasingly focused on stablecoin regulation. Executives from leading cryptocurrency firms have recently held discussions with the Securities and Exchange Commission (SEC), while the Trump administration has called for bringing stablecoins onshore as part of a broader effort to secure US dominance in digital finance.
Stablecoins have become a critical component of the global financial system, serving as a bridge between traditional finance and decentralized finance (DeFi). With a market capitalization exceeding $90 billion, Tether’s USDT remains the most widely used stablecoin, playing a pivotal role in crypto trading, remittances, and cross-border transactions.
However, regulators have expressed concerns over:
Potential depegging events – Situations where a stablecoin loses its 1:1 peg to the U.S. dollar, leading to market instability.
Fragmentation of the stablecoin ecosystem – The proliferation of multiple stablecoin issuers could create regulatory complexity and financial risk.
Impact on traditional banking – The rise of stablecoins could challenge the dominance of banks in payment systems and monetary policy control.
Federal Reserve: Stablecoins Could Strengthen US Dollar Dominance
While stablecoins pose regulatory challenges, some US officials see them as a tool for strengthening the US dollar’s dominance in global markets.
In a recent Feb. 6 interview, Federal Reserve Governor Christopher Waller remarked that US-pegged stablecoins could expand the dollar’s global reach, reinforcing its role as the world’s primary reserve currency. Waller highlighted how stablecoin issuers have become major buyers of US government debt, with their reserves often held in short-term Treasury securities. This practice supports demand for US Treasuries, indirectly benefiting US fiscal policy.
Waller also suggested that both banks and non-bank institutions should be allowed to issue stablecoins, provided they comply with state and federal regulations. However, he also cautioned that stablecoins must be carefully managed to mitigate financial risks.
His remarks indicate a potential shift in the Federal Reserve’s stance, suggesting that stablecoins could be integrated into the US financial system rather than being outright banned or severely restricted.
Tether’s decision to actively engage with US lawmakers marks a strategic evolution for the company. Historically, Tether has operated with limited regulatory oversight, but this new approach signals a willingness to adapt to stricter compliance standards.
This article was originally Posted on Coinpaper.com
