Circle Eyes Hong Kong As Region Develops New Stablecoin Regulation

Circle, the issuer of the world’s second-largest stablecoin, USDC, is planning to establish a presence in Hong Kong as regulators in the country plan to develop new stablecoin regulations.

Last week, lawmakers in the region revealed plans to submit a regulatory framework for stablecoin issuers to the Legislative Council by year-end. The move attracted the attention of multiple stablecoin issuers, including Circle.

Circle to Establish Business in Hong Kong 

According to a local media outlet, Circle is considering applying for a stablecoin issuer license but will wait for the new stablecoin regulation to be introduced. This means it will understand the regulatory requirements before considering applying for the license.

Circle CEO Jeremy Allaire first revealed this move at last week’s Hong Kong FinTech Week event. Allaire cited Hong Kong as an important market for the company’s US dollar-pegged USDC stablecoin. As part of the latest move, Hong Kong will set up a business in Hong Kong and hire more staff.

Chen Qinqi, Vice President of Circle Asia-Pacific, highlighted the advantages of developing a stablecoin system in Hong Kong. According to Qinqi, this includes same-day USD settlement. He also believes Hong Kong has the potential to become a global stablecoin center.

Circle Asian Expansion Efforts 

The latest development aligns with Circle’s expansion efforts in Hong Kong and the broader Asian region. The stablecoin issuer recently formed a partnership through a signed Memorandum of Understanding (MOU) with Hong Kong telecommunications giant HKT to develop a blockchain-based customer loyalty program for merchants in the region. As part of the partnership, HKT would leverage Circle’s Web3 services, such as its programmable wallets, to build decentralized loyalty programs on the blockchain network.

The stablecoin issuer first forayed into Asia with Singapore, where it obtained preliminary approval in 2022 and a full Major Payment Institution (MPI) license last year to offer digital payment token services to customers in the city-state.