Hong Kong's stablecoin licensing has been postponed; it's advised not to wait anxiously for VA dealing and VA custody.

Byline: Attorney Shao Jianguan

Hong Kong’s stablecoin licensing has been delayed for so long without being formally implemented that the market’s first reaction is usually two words: missed deadline.

The image above is from the Hong Kong Monetary Authority’s website

But in my view, what is truly worth discussing here is not only “why it was delayed,” but also how this again highlights a more realistic issue: when it comes to crypto-related licenses, Hong Kong still follows the typical cautious “slow-and-steady implementation” logic.

If something like stablecoin licensing—an item that has been repeatedly paved for by the authorities and whose legislative timetable is relatively clear—has not yet rolled out smoothly as the market expected, then for many payment institutions that are still waiting for VA dealing (virtual asset transaction services) and VA custody (virtual asset custody services), there is even less reason to cling to fantasies that “it will be here soon.”

For people preparing to do crypto payments, stablecoin issuance and redemption payments, and on-chain clearing and settlement businesses, the most dangerous thing right now is not that the licenses are expensive, nor that compliance is difficult, but that you bet the business launch timeline in the wrong place. Without the licenses, you dare not move; but the market window keeps moving forward. In the end, it’s easy to end up in a situation where you’ve prepared everything—except you miss the time.

Why is stablecoin licensing making the market so sensitive?

The reason this stablecoin licensing matter in Hong Kong is tugging at the market isn’t just because it’s important in itself, but because many people treat it as a signal light.

The reason is simple. In Hong Kong, stablecoins are not a fringe topic. They’re one of the most core pieces in the Web3 regulatory rollout of the past couple of years. They affect payments, the flow of funds, and how future on-chain financial infrastructure will be built. If this license can be issued smoothly and clearly, the market will naturally infer a judgment: Hong Kong’s regulatory rollout for crypto finance has truly entered an execution phase.

But the problem now is that this “light” hasn’t come on the way everyone expected. The HKMA (Hong Kong Monetary Authority) is more likely to emphasize prudence, carefulness, the need for thorough preparation, and the need to ensure the quality of institutional implementation. This explanation in itself is completely understandable. Because once stablecoins are formally brought under license-based regulatory supervision, the regulator is never just asking “can it be issued.” It considers the whole set of issues: reserve assets, redemption mechanisms, segregation of funds, anti-money laundering (AML, anti-money laundering obligations), and the transmission of systemic risk. In other words, a slow licensing pace doesn’t necessarily mean the system wasn’t ready—it may also be because regulators do not want to leave any ambiguous space at key milestones.

But the market won’t look at explanations alone; it will also watch the pace. Once the pace is pushed back, outsiders will inevitably start guessing: whether the applicant isn’t ready yet, whether the list hasn’t been finalized, whether the regulator’s internal standards are still being weighed, whether they need to wait for higher-level policy coordination. Which of these guesses is true may not be the key point. What matters is that the market will recalibrate its understanding: for crypto-related licenses, Hong Kong still won’t be fast.

What you should really understand from this “missed deadline” isn’t stablecoins themselves, but Hong Kong’s regulatory style

If you only interpret this delay as a minor detour in the stablecoin licensing process, you’re looking too shallowly. What is really worth understanding is Hong Kong’s consistent approach to crypto regulation: not doing nothing, but doing it very slowly, very steadily, and very much in sequence.

Many people have a natural filter for Hong Kong: they think the financial market is mature, the system is transparent, and the degree of internationalization is high—so once the direction is set, the following licenses and systems will roll out quickly. Reality isn’t like that. When it comes to financial infrastructure, payment systems, public funds, and cross-border fund flows, Hong Kong has never been a “regulator that runs ahead.” It’s been a “confirmation-style regulator.” Meaning: it’s more willing to formally introduce the licensing framework when the market has already seen the direction, the risk boundaries are roughly clear, and the consequences of policy can be controlled.

Stablecoins are a perfect example. Hong Kong already recognized the direction long ago; the system is also indeed being advanced; the policy posture has also been positive throughout. But when it comes time to actually roll out and issue the licenses, the timeline still slows down. Why? Because once licenses are issued, it’s not just handing out paper to a few companies—it’s the regulator formally confirming that an entire new set of financial arrangements can enter an operating state. It also implies that any later licenses related to virtual-asset payments, trading, custody, and clearing and settlement will most likely move forward along the same path. It’s not because the market is impatient or because the industry is eager—it’s because the regulator itself believes that “now is the stage when approvals can be granted.”

Don’t expect VA dealing and VA custody to come out quickly

This is also the one point I want to remind the market of most. Right now, many payment institutions, overseas expansion projects, and stablecoin payment teams are actually watching two directions:

VA dealing: virtual asset transaction services

VA custody: virtual asset custody services

The reason isn’t hard to understand. For many crypto payment businesses, these kinds of licenses are indeed highly compatible. Especially for teams that want to do stablecoin collections and payments, merchant settlement, on-chain fund aggregation, and integrate wallets with clearing—naturally they feel that once Hong Kong releases these two licenses, their business will have a strong landing spot.

The issue is exactly here. “Compatibility” doesn’t mean “it will be coming soon.” If even stablecoin licensing—which has been on the table for a long time and whose system-building is relatively mature—has been delayed, then how could VA dealing and VA custody, which are more in the later-stage supporting layer, come faster than stablecoins? In terms of regulatory sequencing, these licenses likely won’t run ahead of stablecoin licensing. The reason is simple: stablecoins are a matter of underlying payments and the unit of value; to some extent, they are closer to “infrastructure.” VA dealing and VA custody, on the other hand, are more about licenses built around virtual-asset services. They are important, but regulators typically roll them out after a more complete main framework is in place.

So if there are still teams whose business plans are written like this right now: “Wait first. Once Hong Kong’s VA dealing/VA custody comes out, we will launch immediately,” then this kind of timeline arrangement carries significant risk. It’s not because those two licenses won’t come, but because you might not be able to wait long enough.

For people doing crypto payments, the biggest fear isn’t having no licenses—it’s waiting in the wrong place

When many people plan compliance, they’re used to asking one question first: “What is the most ideal license?” That question is correct, but incomplete. What you should ask is: “Which license is the most suitable for me to get my business running first at my current stage?” These are two completely different questions.

If what you’re doing involves crypto payments, stablecoin collections and payments, cross-border settlement, and on-chain clearing-related business, then in the long run, Hong Kong is indeed worth building a presence in. Its brand effect, institutional credibility, and ability to radiate toward the Asian market are all strong. The problem is that “worth building long-term” doesn’t mean it’s suitable to fully bet on launching your business in the short term.

Business has a window period. Especially in payment businesses, after your license is obtained, the market won’t stand still and wait for you. Customers won’t wait, partners won’t wait, and competitors definitely won’t wait. While you’re still anxiously waiting for a future license, others may already be using licenses from other jurisdictions to run merchant onboarding, channels, wallets, OTC (over-the-counter trading), and clearing and settlement links. By the time you finally get a “theoretically more perfect” license, the market landscape may have already been occupied by others. So from a business perspective, the most dangerous compliance strategy isn’t “choosing the wrong license,” but staying inactive for a license whose timeline you don’t even know yet. That directly delays business progress; in the end, it won’t be “more compliant and safer”—it will be that the market is gone first.

If you truly want to do crypto payments, it’s better to first see whether other jurisdictions can get your business running

This is also my more practical recommendation. If your goal right now is to roll out a crypto payments business as quickly as possible, rather than simply writing a Hong Kong licensing story, then instead of painfully waiting for VA dealing and VA custody, it’s better to seriously look at a few more realistic paths first: U.S. MSB, U.S. MTL, Canadian MSB, Australian DCE, and so on.

Each of these jurisdictions has its own issues and its own costs—there is no such thing as a “one-size-fits-all license.” But they share one advantage: at least they can let you start moving under clear rules. For many payment businesses, the most important thing isn’t to build the most beautiful global regulatory architecture from day one, but to find a starting point that can legally launch, be sustained and iteratively improved, and integrate with customers and partners. As long as the business gets running first, then later—whether it’s adding Hong Kong, adding Europe, adding the Middle East, or building a multi-jurisdiction structure—it’s a matter of upgrading by momentum. Conversely, if the first step can’t be taken for a long time, even a beautifully designed license down the line may remain only on PPT. So the usual practical strategy isn’t “wait only for Hong Kong,” but rather: continue to pay attention to Hong Kong, while not betting your business launch solely on Hong Kong.

What’s worth抢 isn’t the license that hasn’t come out yet—it’s your market position

In the end, the anxiety many teams have now isn’t really about the license itself—it’s about being afraid of missing the next window for crypto payments. This anxiety is valid. But the solution might not be to keep waiting. The delay in stablecoin licensing has already given the market a very clear reminder: Hong Kong will keep moving forward, but it won’t accelerate just because the market is in a hurry. If that’s the case, a truly mature strategy shouldn’t be passive waiting—it should be proactive positioning.

Whoever first lays out the licensing path, the funds path, the partnership path, and the customer path has a better chance to capture the market first. By the time Hong Kong’s subsequent licenses are actually released, you can add those licenses, upgrade the structure, and scale up—rather than starting from zero and playing catch-up. So if you’re working on crypto payments, stablecoin collections and payments, or Web3 cross-border settlement right now, my advice is very clear: don’t put all your hopes on Hong Kong’s next license.

Since stablecoins can be “jumping deadlines,” there’s even less reason to suffer through waiting for VA dealing and VA custody. What you should really do isn’t to keep guessing when they will come out—it’s to find jurisdictions and structures that can get your business running as soon as possible.