Hong Kong is preparing a series of measures to expand its offshore yuan business while its stablecoin market remains at an early stage. During a Legislative Council briefing, Christopher Hui, Secretary for Financial Services and the Treasury, said finance is considered Hong Kong’s biggest advantage under both the new First Five-Year Plan, covering 2026 to 2030, and the 2026 Policy Address.

Hui said the Hong Kong Monetary Authority is discussing ways to optimize its currency swap arrangement with the People’s Bank of China. The HKMA will introduce a seven-day offshore yuan liquidity tendering facility and is studying short-term debt instruments intended to complete the offshore yuan interest-rate curve. A complete curve would give market participants reference rates for pricing yuan instruments at shorter maturities.

Hong Kong Exchanges and Clearing is separately preparing an offshore renminbi bond index that could support exchange-traded funds. Starting in November, holdings under Northbound Bond Connect will also be eligible for use as collateral across three HKEX clearing houses, a change that broadens the potential uses of mainland bondholdings held through the scheme.

Hong Kong’s offshore yuan lending reached a record 935 billion yuan in 2025, while offshore yuan bond issuance totaled 1 trillion yuan for the second consecutive year. The HKMA has raised its RMB Business Facility to 500 billion yuan and extended its loan term to three years. The figures illustrate the scale of the offshore yuan market the new measures are intended to support.

Hui said the government would mainly spend in Hong Kong dollars. Hong Kong will also retain its currency peg to the U.S. dollar rather than adopting a yuan-linked arrangement or a floating exchange rate.

The finance chief further said the government would table an amendment bill this year to establish a licensing regime for virtual-asset trading, custody, advisory and management services. The regime would cover services stablecoin issuance, which is governed by separate legislation.

Stablecoin issuance is already covered by a separate framework. The Stablecoins Ordinance took effect on August 1, 2025, and received 36 applications by the end of September that year. Cryptopolitan reported in June that the first two issuer licenses had subsequently been awarded. The 2026 Policy Address directs the Securities and Futures Commission to promote trading in regulated stablecoins on licensed platforms, although little supporting infrastructure has been established so far.

HSBC said on September 30 that it had named its planned Hong Kong-dollar stablecoin “HSBC RedCoin.” The bank expects to launch it in the second half of the year, initially limiting access to its PayMe wallet and mobile application. In a survey of more than 1,000 customers, 74% said they could identify at least one stablecoin use case, although one-quarter incorrectly believed the tokens were issued by the government, a result that points to limited familiarity with stablecoins among the bank’s customers. HSBC’s announcement is available here.

The second license was awarded to Anchorpoint Financial, a venture backed by Standard Chartered, HKT and Animoca Brands. In August, the company began testing its Hong Kong-dollar token, HKDAP, with a select group of professional investors.

Both licensed issuers are developing tokens pegged to the Hong Kong dollar rather than the yuan. A February notice from the People’s Bank of China and seven other agencies prohibited unauthorized yuan-linked stablecoins both onshore and offshore. The notice extended China’s long-standing cryptocurrency ban and warned that companies may not issue a renminbi-pegged coin abroad without approval.

The Legislative Council briefing is documented by the Hong Kong government here.