Hong Kong’s First Regulated HKD Stablecoin Enters Institutional Phase Amid Payment Tests and Contract Concerns

Hong Kong’s first regulated Hong Kong dollar-backed stablecoin, HKDAP, entered a controlled institutional phase on August 12. Issued by Anchorpoint Financial under a licence from the Hong Kong Monetary Authority, the token is currently available only to institutions, corporate clients and professional investors through authorised distributors. Retail access remains closed and is tentatively expected near the end of 2026, subject to market conditions and regulatory clearance.

Anchorpoint is a subsidiary of Standard Chartered Bank (Hong Kong) and operates as a joint venture with HKT and Animoca Brands. It holds one of only two stablecoin issuer licences granted by the HKMA after 36 applications were submitted before the September 2025 deadline. HSBC received the other licence. The Stablecoins Ordinance, which took effect on August 1, 2025, sets the framework: issuers must maintain at least HK$25 million in paid-up capital, keep reserves segregated from corporate funds, allow redemption at face value within one business day, and pay no interest on the tokens.

Early Distribution and Insurance Payment Pilot

HashKey Exchange and OSL Group serve as authorised distributors. HashKey has already completed minting and redemption transactions with eligible clients using real funds. In a subsequent live test with YF Life Insurance International Limited, the exchange and the insurer processed HKDAP subscription and redemption flows. The exercise examined the steps required before policyholders could use the stablecoin for premium payments.

Under the proposed model, customers would acquire HKDAP with Hong Kong dollars through HashKey Exchange or transfer existing holdings from a personal wallet to settle premiums. Traditional premium settlements often take two to three business days. The companies stated that an HKDAP transaction could provide near to real-time crediting once the service is introduced. YF Life intends to explore HKDAP as a payment option, subject to regulatory requirements and its own implementation timetable, and aims to be among the first Hong Kong insurers to accept the regulated stablecoin.

HashKey has indicated plans to expand HKDAP use cases beyond insurance into corporate payments and cross-border trade in partnership with other financial institutions.

Smart-Contract Review Raises Technical Questions

Security analyst Yajin Zhou and his team examined the live Ethereum mainnet contract for HKDAP, which has verified source code on Etherscan. Their review concluded that the contract is not production-ready and contains elements that conflict with HKMA guidelines for stablecoin issuers.

Governance is highly centralised: a single key can mint new tokens, freeze accounts, pause the system and force burns. The contract lacks a time-lock mechanism commonly used to delay high-risk actions for review. Compliance controls intended to restrict unauthorised users were found defective. The KYC module’s revocation function fails open, meaning wallets approved by a de-registered provider can still transact. KYC proofs are not validated on-chain, and deregistered verifiers can still approve new users. The contract rebuilds basic security features with custom code rather than relying on battle-tested libraries, and most identified issues appear in that custom logic. The beta designation does not resolve these findings, according to the analysis.

Market Context and Regulatory Guardrails

HKDAP is designed to maintain a one-to-one value with the Hong Kong dollar and is backed by eligible high-quality Hong Kong dollar assets held under the regulated structure. Public distribution is limited to licensed issuers, banks and regulated platforms, which explains the gradual, institution-first approach.

The global stablecoin market is valued at roughly $300 billion, with Tether accounting for about 61 percent. No non-US-dollar stablecoin has reached comparable scale. The Hong Kong dollar itself has been pegged to the US dollar since 1983, so HKDAP tracks a currency closely linked to the dollar system even while offering regulated local settlement.

The launch coincides with ongoing efforts by Hong Kong authorities to address financial scams. On August 13 the HKMA issued warnings about fraudulent websites impersonating several local banks, part of a broader pattern of security alerts in the sector.

Anchorpoint has not released supply or trading-volume figures for the initial phase. Further expansion of access and use cases will depend on continued testing, regulatory compliance and market conditions as the beta period progresses.