Standard Chartered Participates in Joint Venture to Issue Hong Kong Dollar-Backed Stablecoin

Standard Chartered Bank Hong Kong (SCBHK), Animoca Brands and HKT have agreed to form a joint venture to issue a stablecoin backed by the Hong Kong dollar.

The new joint venture intends to apply for a license from the Hong Kong Monetary Authority (HKMA) under a new regulatory regime, subject to the passage of the Stablecoins Bill, the companies said in a Monday (Feb. 17) press release.

Hong Kong’s stablecoin bill is under review and, if enacted, will require stablecoin issuers to obtain an HKMA license and comply with reserve and price stability requirements, Cointelegraph reported Monday.

The joint venture will benefit from Standard Chartered’s bank-grade infrastructure, rigorous governance and experience working with stablecoin issuers globally; Animoca Brands’ expertise and extensive network in the Web3 space; and HKT’s mobile wallet expertise, according to the companies’ press release.

The three companies have been working together in an HKMA stablecoin issuer sandbox that was launched in July to explore how stablecoins can play a role in the development of financial markets and payments, per the release.

Their joint venture’s Hong Kong dollar-backed stablecoin will be designed to enhance both domestic and cross-border payments and to serve both consumers and merchants, the release said.

“By leveraging the bank’s and our partners’ core strengths, we aim to launch a stablecoin that can be used securely by institutions and individuals across a wide range of use cases,” Mary Huen, CEO, Hong Kong and Greater China & North Asia, Standard Chartered, said in the release. “We are dedicated to staying at the forefront in driving FinTech innovation alongside the regulators, partners and clients, further consolidating the role of Hong Kong as an international finance center.”

In another, separate effort, Standard Chartered was among the firms that participated in a pilot project called the Canton Network that explored the potential of a privacy-enabled open blockchain network allowing for real-time settlement and immediate reconciliation across counterparty systems.

In September, the HKMA said that its second phase of testing had begun for its e-HKD Pilot, where 11 groups of firms are exploring tokenized assets, programmability and offline payments.