(Yicai) June 10 -- Hong Kong’s first stablecoin should appear around the middle of this year, when Anchorpoint Financial is expected to launch its Hong Kong dollar-pegged token, according to the chief executive of the city’s monetary authority.

Trials of Anchorpoint’s HKDAP, meaning HKD at Par, are set to begin in a few weeks, Eddie Yue said during an official visit to Beijing on June 8. Hong Kong and Shanghai Banking Corporation, the other recipient of the city’s first stablecoin issuer licenses, plans to introduce its HKD-pegged token in the third or fourth quarter of this year, he said.

A stablecoin is a type of cryptocurrency intended to maintain a steady and predictable value, usually by being pegged to a traditional fiat currency. The Hong Kong Monetary Authority awarded issuer permits to Anchorpoint, a joint venture of Standard Chartered Bank, Hong Kong Telecommunications, and Web3 firm Animoca Brands, and HSBC on April 10.

The HKMA will first observe how the initial batch of approved institutions operate, and then assess whether to grant additional stablecoin licences, Yue pointed out.

Anchorpoint and HSBC are targeting different stablecoin applications, Yue said. Anchorpoint focuses on cross-border payments, aiming to reduce the costs of trans-border remittances and improve transaction speed, making it suitable for cross-border e-commerce and regional trade, while HSBC is more focused on expanding retail payment uses, and may connect to clearing platforms to facilitate the clearing of tokenized assets in the future, he said.

After the China Securities Regulatory Commission’s crackdown on unlicensed cross-border stock trading services for mainlanders, financial institutions in Hong Kong have beefed up their account opening review process, Yue said. They now require clients to declare the legitimacy of the source of their funds and are shutting down long-dormant accounts, he added.

An HKMA spokesperson said on June 6 that it now requires brokers to implement additional measures to open and manage mainland investors’ accounts and banks to adopt high business standards similar to those of the CSRC.

Editor: Futura Costaglione