Hong Kong's stablecoin licensing delayed: Don't wait anxiously for VA dealing and VA custody

Hong Kong’s stablecoin licensing has been delayed for so long that it still hasn’t been formally implemented. The market’s first reaction is usually two words: missed the deadline.

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

But in my view, what’s truly worth discussing here isn’t just “why it’s been delayed,” but rather how it again highlights a more realistic issue: Hong Kong’s approach to crypto-related licenses is still a classic case of a cautious, step-by-step rollout.

Even for stablecoins—which have already been repeatedly laid out by the authorities, and whose legislative timeline is relatively clear—if they still haven’t landed as smoothly as the market expected, then there’s even less reason for many payment institutions that are waiting for VA dealing (virtual asset dealing services) and VA custody (virtual asset custody services) licenses to cling to fantasies that “it’ll come soon.”

For people preparing to do crypto payments, stablecoin receipts and payments, and on-chain settlement and clearing business, the most dangerous thing right now isn’t that the licenses are expensive, nor that compliance is hard. It’s that you’ve placed the business launch timeline in the wrong spot. If the license hasn’t come through, you don’t dare to move; but the market window is still moving forward. In the end, it’s easy to end up in a situation where you’ve prepared for everything—except you missed the time.

Why is stablecoin licensing so sensitive to the market?

This stablecoin licensing matter in Hong Kong stirs up the market not only because it’s important, but because many people treat it as a signal light.

The reason is simple. Stablecoins in Hong Kong are not a fringe topic. Over the past two years, they’re one of the most core pieces in the Web3 regulatory layout. They affect payments, the movement 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 deduce 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 turned on as everyone expected. The HKMA (Hong Kong Monetary Authority) is more likely to emphasize prudence, carefulness, the need for sufficient preparation, and the need to ensure the quality of制度落实 (institutional implementation). This explanation is entirely understandable on its own. Because once stablecoins are formally brought under licensing regulation, regulators have never only looked at “whether you can issue them.” They also look at the whole set of issues: reserve assets, redemption mechanisms, segregation of funds, anti-money laundering (AML, anti-money laundering obligations), and systemic risk transmission. In other words, a slow licensing process doesn’t necessarily mean the framework isn’t ready—it could also be because regulators don’t want any ambiguity left at key checkpoints.

But the market won’t only look at the explanations—it will also look at the tempo. Once the schedule keeps getting pushed back, the outside world will inevitably start guessing: is the applicant not ready yet, is the shortlist not finalized yet, are the internal regulatory standards still being calibrated, are they waiting for higher-level policy coordination. Which of these guesses is actually true may not matter. What matters is that the market will recalibrate a recognition: Hong Kong’s crypto-related licensing will still not be fast.

What this “missed deadline” most needs to be understood isn’t stablecoins themselves, but Hong Kong’s regulatory style

If you only interpret this postponement as a small hiccup in the stablecoin licensing process, you’re really looking too shallowly. What’s truly worth understanding is Hong Kong’s consistent style in crypto regulation: it doesn’t mean not doing it; it means doing it very slowly, very steadily, and with careful sequencing.

Many people have a natural filter for Hong Kong: they think the financial market is mature, the system is transparent, and the level of internationalization is high—so once the direction is set, the licenses and institutions that follow will be rolled out quickly. Reality is not like that. When it comes to financial infrastructure, payment systems, public funds, and cross-border fund flows, Hong Kong has never been “race-to-the-start” regulation. It’s “confirmation-based” regulation. In other words: it’s more willing to formally launch the licensing framework once the market has already seen the direction, the risk boundaries are largely clear, and the policy consequences can be controlled.

Stablecoins are a perfect example of that. Hong Kong already recognized the direction long ago; the framework has also indeed been moving forward; and the policy posture has also been positive throughout. But when it comes time to actually implement the licensing, the pace will still slow down. Why? Because issuing a license isn’t just handing a piece of paper to a few companies—it’s equivalent to regulators formally confirming that a new set of financial arrangements can enter operational status. It means that any licenses later related to virtual-asset payments, dealing, custody, and clearing and settlement will very likely be advanced along the same path. It’s not about how urgently the market is pushing, or how much the industry is expecting. It depends on whether regulators themselves believe: now is the stage when they can allow it to proceed.

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

This is also the one point I most want to remind the market. Many payment institutions, overseas expansion projects, and stablecoin payment teams are currently watching two directions:

• VA dealing: virtual asset dealing services

• VA custody: virtual asset custody services

The reason isn’t hard to understand. For many crypto payment businesses, the fit of these kinds of licenses really is high. Especially teams that want to do stablecoin receipts and payments, merchant settlement, on-chain fund aggregation, and integration between wallets and clearing, naturally think: once Hong Kong issues these two licenses, their business will have a strong landing spot.

The issue is right here: “fit” doesn’t equal “will come soon.” If even something like stablecoin licensing—already out in the open for a long time and with a relatively mature institutional build-out—still gets postponed, then how could VA dealing and VA custody, which are more “downstream” and “supporting-layer” licenses, be faster than stablecoins? From the standpoint of regulatory sequencing, these licenses are very likely not to run ahead of stablecoins. The reason is simple: stablecoins are a bottom-layer issue of payments and fund units—in a sense, they’re closer to “infrastructure.” VA dealing and VA custody, on the other hand, are more around business licenses for virtual asset services. They’re important, but regulators usually push them after a more complete master framework.

So if there are still teams whose business plans are written like this: “Wait for it—once Hong Kong VA dealing/VA custody comes out, we’ll launch immediately,” then that pacing arrangement carries substantial risk. It’s not because these two licenses won’t come. It’s because you may not be able to wait.

For people doing crypto payments, the worst risk isn’t having no license—it’s waiting in the wrong place

Many people doing compliance planning are used to asking one line first: “What’s the most ideal license?” That question is correct, but incomplete. What you should ask instead is: “Which license is the most suitable for me to get my business running at my current stage?” Those are two completely different questions.

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

Businesses have a window period. Especially payment businesses: once your license comes through, the market won’t stand still waiting for you. Customers won’t wait. Partners won’t wait. Competitors won’t wait even more. While you’re still waiting today for some 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 license that’s “theoretically more perfect,” the market landscape may have already been taken by others. So from a business perspective, the most dangerous compliance strategy isn’t “choosing the wrong license.” It’s choosing to wait for a license that you don’t even know when it will come, and staying inactive for the long term. This will directly delay business progress. In the end, it won’t be “more compliant and steadier”—it will be “the market is gone first.”

If you truly want to do crypto payments, you might as well first see whether other jurisdictions can get the business running

This is also my more practical recommendation. If your current goal is to launch your crypto payments business as quickly as possible—not just to produce a Hong Kong license story—then instead of painfully waiting for VA dealing and VA custody, you should seriously look at several 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’s no such thing as a “one-size-fits-all license.” But they share one common advantage: at least they can let you move first under clear rules. For many payment businesses, the most important thing isn’t to build the world’s prettiest regulatory architecture from day one. It’s to find a starting point that can legally launch, sustain iteration, and integrate with customers and partners. As long as the business runs first, then later whether you “fill in” Hong Kong, “fill in” Europe, “fill in” the Middle East, or build a multi-jurisdiction structure—it can all be an upgrade by seizing the momentum. Conversely, if even the first step can’t be taken after a long time, then even a very beautiful license design later may end up only as a PPT. So the practical strategy usually isn’t “only wait for Hong Kong.” It’s: keep monitoring Hong Kong, but don’t have the business launch bet only on Hong Kong.

What’s really worth competing for isn’t the yet-to-be-issued license—it’s your market position

In the end, what many teams are anxious about right now isn’t the licenses themselves. It’s that they’re afraid of missing the next window for crypto payments. That 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 doing it, but it won’t speed up just because the market is anxious. If that’s the case, then a truly mature strategy shouldn’t be passive waiting—it should be proactively choosing your position.

Whoever can build first: the license path, the funding path, the partner path, and the customer path—will have a better chance to capture market share first. Then when Hong Kong’s subsequent licenses are eventually issued, you can fill in licenses, upgrade structures, and scale up; you won’t have to start from zero and catch up again. So if you’re currently looking at crypto payments, stablecoin receipts and payments, and Web3 cross-border settlement, my advice is very clear: don’t put all your hopes on Hong Kong’s next license.

Since stablecoins can get “missed deadlines,” there’s no need to painfully wait for VA dealing and VA custody either. What you should do isn’t keep guessing when they’ll come out, but find jurisdictions and structures that can get your business running as soon as possible.