Circle Clarifies Its Position on HKD Stablecoin
Circle, the company behind the USDC stablecoin, has denied recent media reports claiming it plans to issue a Hong Kong dollar (HKD)–backed digital currency. The clarification follows growing speculation around Hong Kong’s new regulatory framework for fiat-referenced tokens and the increasing interest among local firms to launch HKD-pegged stablecoins.
In a statement, Circle emphasized that while it supports Hong Kong’s efforts to establish a clear stablecoin licensing regime, it has no current plans to issue an HKD stablecoin. The company reiterated its commitment to engaging with regulators to promote transparency, consumer protection, and financial stability within the digital asset sector.
Hong Kong’s Stablecoin Ordinance Takes Shape
Hong Kong recently enacted its first Stablecoins Ordinance, which will take effect on August 1, 2025. The new law introduces strict requirements for stablecoin issuers, including:
- 100% backing by high-quality liquid assets, such as cash or short-term government securities
- Ring-fenced reserves to protect token holders
- Same-day redemption at face value
- Capital and liquidity standards modeled after the Basel framework
Additionally, issuers must incorporate locally and maintain sufficient capital in Hong Kong. License applications are expected to open in August 2025, but the Hong Kong Monetary Authority (HKMA) has stated that only a few licenses will be issued initially, likely not before early 2026.
Market Speculation and Circle’s Stance
Earlier reports had suggested that Circle might take advantage of the new regime to launch an HKD-pegged stablecoin, potentially competing with major Chinese technology firms interested in the space. However, the company’s recent clarification makes it clear that it is focusing on regulatory dialogue rather than expanding into new currency-backed products at this stage.
For now, the future of Hong Kong’s stablecoin market hinges on how licenses are distributed and whether global issuers like Circle eventually decide to participate. Circle’s current position signals caution — it remains open to collaboration under a regulated framework but is not pursuing any HKD-based stablecoin plans.
