The Hong Kong Monetary Authority (HKMA) has finally issued its first batch of stablecoin licenses after previously missing the deadline—HSBC and Standard Chartered, consistent with our earlier analysis in "Hong Kong Dollar Stablecoins Don’t Need to Be USDC."

While the outcome itself was predictable, it’s deeply disappointing.

Just as I’ve been studying Professor Jiang Xueqin’s theory of geopolitical game theory, Rain also published "Hong Kong Stablecoins: A Carefully Designed 'Open Strategy'." With these two developments converging, I’d like to take a speculative, "wild" look at this licensing round through the lens of game theory—just for fun.

Jiang Xueqin’s analysis of Trump’s Iran war logic goes like this: On the surface, the war is an absurd blunder. But what if we reverse the assumption—that Trump actually wanted this “defeat”? Then he might be a genius.

This article applies the same framework to Hong Kong’s stablecoin issuance, hypothesizing a top-tier "open strategy."

One: A List That Disappoints Everyone

The HKMA’s first batch of stablecoin licenses, released yesterday, is precisely the version the market least wanted:

Standard Chartered, HSBC; Bank of China (Hong Kong) absent.

This result is disheartening. Foreign banks have no inherent interest in issuing HKD stablecoins, while institutions like BOC Hong Kong—with clear strategic intent—were sidelined. Crucially, key players such as brokers, exchanges, and internet companies were systematically excluded from the legislative consultation phase.

With the initial licenses granted, the narrative around Hong Kong stablecoins has been sentenced to “suspended death.”

But if you were HKMA, would you really select such a list?

You hold full experience from the 2024 Project Ensemble sandbox. You’ve observed the entire journey of digital RMB—from inception to rollout. You command the natural advantage of the dual-track system between SFC and HKMA. And yet you choose a list that fails even the most basic commercial viability?

Unless… this list was never meant to satisfy the market.

Two: Reverse Reasoning: What If We Assumed Wrong from the Start?

To understand this list, we need a new framework.

Recently, I’ve been diving into Professor Jiang Xueqin’s series on game theory. In his episode dated April 2nd on Trump’s Iran war, one line struck me deeply:

Jiang’s argument is simple: If you assume Trump wants to “win,” every move seems irrational. But flip the assumption—he actually wants to “lose” this war, using a controlled collapse in the Middle East to shift global energy dependence toward North America. Suddenly, every seemingly foolish action becomes a coherent strategy.

This is Managed Collapse—not avoiding failure, but engineering a failure that benefits you.

Now, return to the stablecoin licensing. If we assume the goal was to “grow the HKD stablecoin industry,” every detail remains inexplicable: granting licenses to institutions with zero incentive, setting barriers so high they’re commercially unviable, repeatedly challenging applicants’ business models, and excluding those with the strongest strategic will.

But what if we reverse the assumption—that the real target wasn’t the “commercial stablecoin industry” at all?

Then everything fits perfectly.

Following this hypothesis, the three lines—use cases, institutions, and infrastructure—all align seamlessly.

Three: Use Case Layer: Three False Premises

Every applicant pitches three narratives: cross-border payments, RWA (Real World Assets), and C-end consumption.

But none holds up.

A. Cross-Border Payments Is a False Premise

The typical flow: a company in Country A mints stablecoin A in local fiat, trades it on secondary markets for stablecoin B, pays a company in Country B, which redeems it back into local fiat B. Essentially, it’s using Web3 exchanges to lower costs in foreign exchange services traditionally monopolized by banks—financial inclusion for SMEs. The logic seems sound.

But in this chain, the stablecoin’s lifecycle lasts only during the transfer.

When Company B receives the stablecoin, unless it immediately initiates another trade, it must still redeem for fiat. You don’t need a one-time transfer—you need a perpetual “next buyer” loop.

Rain points out a critical flaw—the Fisher Equation: MV = PT. Money supply times velocity equals price times economic output. On-chain stablecoin velocity is an order of magnitude higher than traditional bank settlement.

This means: less stablecoin supply is needed to support the same volume of trade. The more successful cross-border payments become, the lower the demand for stablecoin reserves.

This isn’t a closed loop—it’s an anti-loop.

B. RWA Is a False Premise

At its core, RWA is simply tokenization of asset shares.

Funding is raised in stablecoins, but asset managers must use those stablecoins to buy underlying assets. Yet, asset sellers almost never accept stablecoins—why would they? Asset securitization exists for exit or cash flow optimization, not to hold stablecoins.

Result: in RWA scenarios, the stablecoin’s lifecycle ends at the fundraising stage.

C. C-End Consumption

Short answer: Hong Kong’s retail market is too small to matter.

All three narratives are false premises. And as the regulator overseeing the entire process, HKMA knows this better than any applicant.

So why issue licenses?

Four: Institutional Layer: A “Voluntary” List

Neither HSBC nor Standard Chartered appears to have come with strategic intent.

HSBC likely participated passively. This makes sense—its strategic focus has long shifted away from stablecoins. Its real push is tokenized deposits. For HSBC, applying for HKD stablecoin licensing is more defensive than strategic.

Standard Chartered shows some initiative, but Hong Kong is just one node in its global map. While HKD stablecoins can integrate with its Libeara platform, Hong Kong has never been its primary battleground.

Meanwhile, the institution with the clearest strategic will—Bank of China (Hong Kong)—is absent.

Strange? Not at all. Once you grasp that the government is designing a mechanism where “voluntariness” becomes the optimal choice:

Rule One: Licenses only go to note-issuing banks.

This instantly creates an exclusive club. If HSBC doesn’t apply, only Standard Chartered will remain on the digital HKD rail. For an institution that views “note issuance” as its 160-year brand cornerstone, losing this symbolic position is unbearable. So HSBC must participate.

Rule Two: Extremely high technical and compliance barriers.

Building a multi-million-dollar HSM facility, anti-money laundering architecture, on-chain monitoring, and reserve asset pools—this turns stablecoin issuance into pure cost, not a business. Normal commercial entities calculate ROI and walk away. But HSBC and Standard Chartered can’t afford to leave—Rule One already locks them in.

They’re not here to profit—they’re here to avoid losing their seat.

Rule Three: Repeatedly challenge business logic.

This is the most refined rule. During interviews, HKMA kept asking applicants the same question: Why issue your own stablecoin instead of using someone else’s? This effectively tells applicants upfront: I don’t care if you make money. The only acceptable answer is: “I can help run the infrastructure for Hong Kong.”

Together, these three rules mean HKMA imposes nothing forceful.

HSBC and Standard Chartered applied “voluntarily,” invested tens of millions in USD “voluntarily,” and took on user education and ecosystem development costs “voluntarily.” But each “voluntary” decision was the optimal choice under HKMA’s pre-set rules.

This isn’t command—it’s design.

That’s why BOC Hong Kong’s absence makes perfect sense—those with strong strategic will aren’t suited to be infrastructure contractors. Strategic institutions would turn stablecoins into proprietary products with their own rhythms and goals. HKMA doesn’t want products—it wants infrastructure.

And besides, BOC Hong Kong is already working on another track.

Five: Infrastructure Layer: Riding the Wave to Push Something Otherwise Unpushable

What HKMA truly wants is e-HKD.

e-HKD is Hong Kong’s central bank digital currency—Hong Kong’s version of digital RMB. Its goal is clear: gradually migrate interbank clearing and retail payments onto a blockchain-based, central bank-issued HKD. This has been the government’s vision for years—the next-generation financial infrastructure and the strategic endpoint.

The 2024 Project Ensemble sandbox was the first test along the e-HKD path: banks and HKMA jointly maintaining a consortium blockchain, tokenizing deposits, re-engineering interbank clearing and settlement. Technically it worked—but momentum stalled. Only HSBC and Standard Chartered joined; smaller banks lacked motivation.

The reason wasn’t technology—it was lack of demand-side traction. User education, scenario development, and technical trial-and-error costs—no one was willing to pay.

The latest evidence lies in Hong Kong itself. In May 2024, digital RMB was officially integrated into Hong Kong’s FPS (Faster Payment System), becoming the world’s first bilateral link between a central bank digital currency and a fast payment system. After two years, by March 2026, there were about 80,000 digital RMB wallets across Hong Kong, 5,200 merchant participants, and 18 local banks involved in top-ups. For a population of 7.5 million, this hardly constitutes “adoption.”

What Hong Kong residents actually use daily are Alipay HK, WeChat Pay HK, and FPS itself.

Returning to Section Four: Why did BOC Hong Kong miss the stablecoin list? The main institution driving digital RMB adoption in Hong Kong is precisely BOC Hong Kong. In October 2025, BOC Hong Kong partnered with Circle K and FreshUp—over 380 convenience stores and 1,200 vending machines across Hong Kong began accepting digital RMB payments.

In other words, BOC Hong Kong’s strategic focus has always been on digital RMB. Its absence from the stablecoin list isn’t exclusion—it’s because it’s already doing something more direct.

HKMA sees clearly: without external momentum, e-HKD could never be pushed forward. Enter the stablecoin hype.

Stablecoins provide something HKMA could never build alone: free demand-side momentum. Buzz, media, influencers, VCs, global narratives—all free. The rest follows naturally.

Phase One: Let licensed banks use the “commercial stablecoin” narrative to drive users, pilots, and technology. HSBC and Standard Chartered fund HSM facilities themselves, build KYC/AML systems, educate the public on on-chain HKD, convince merchants to join, and operationalize cross-border B2B flows—tasks that e-HKD originally wanted to do but couldn’t.

Phase Two: Once user habits, settlement patterns, and tech stacks are established, HKMA introduces its own clearing layer as the mandatory path for interbank settlement. Licensed stablecoins are then incorporated into this rail. Later, e-HKD launches as a native asset, and licensed stablecoins gradually become “upper-layer encapsulations” of e-HKD.

Users see the same brands, wallets, and interfaces—but beneath, the settlement layer has quietly transitioned from commercial banks to the central bank.

This path mirrors the digital RMB’s “dual-layer operation” architecture: direct participants on the front end, central bank behind the scenes.

Same architecture, different routes. The difference? China pushes top-down; Hong Kong leverages bottom-up momentum.

HKMA uses the stablecoin regulation to push e-HKD—not e-HKD pushing itself.

Six: From Global Financial Hub to HKD Clearing Sovereignty

Hong Kong’s core asset is depreciating.

For decades, Hong Kong’s status as an international financial hub rested on one thing: access to the U.S. dollar clearing system. Stock financing, interbank lending, trade settlement, private banking—all built on this foundation.

But today, this asset is fraying on three fronts: political weaponization of the dollar system makes access uncertain, sluggish Chinese IPOs weaken the primary market, and geopolitical tensions raise costs for traditional correspondent channels.

The next battle for international financial hubs isn’t about who has bigger stock markets or more private wealth—but who controls the next-generation financial infrastructure and clearing sovereignty.

The U.S. is integrating stablecoins into the dollar clearing system via the GENIUS Act, turning USDC into a digital extension of the dollar. Europe is using MiCA to turn EMT into a digital euro clearing model. China is rebuilding cross-border RMB clearing with digital RMB.

Three major currency zones are doing the same thing: extracting their domestic clearing sovereignty from the SWIFT-era correspondent banking model and embedding it into their own CBDC or stablecoin architecture.

Hong Kong lacks monetary sovereignty—under the linked exchange rate system, HKD issuance is inherently tied to the U.S. dollar. But Hong Kong can compete for clearing sovereignty: making HKD settlement less dependent on traditional SWIFT and correspondent banks, and building a next-generation infrastructure under HKMA’s control.

Viewed through this lens, everything clicks:

The “commercial stablecoin” narrative was never the goal—it was a tool;

HSBC and Standard Chartered’s role is to carry out user education and ecosystem validation on behalf of the government;

BOC Hong Kong’s absence isn’t oversight—it’s strategic quietness;

VAOTC may never fully materialize, because the crypto speculation mission has already been fulfilled.

This is a controlled narrative downgrade—letting Web3 hype dissipate while building the underlying clearing sovereignty.

As Jiang Xueqin said: failure is the point.

The key is who designs this “failure,” and who truly benefits from it.

Seven: Final Thoughts

Does Hong Kong have Web3? After years of loud debates, maybe it does. But from a historical perspective, perhaps it never really did.

What matters now is: after distilling Web3 down, what remains?

Actually, Hong Kong never needed Web3—Hong Kong needs a ticket to the next generation of financial hubs.

And that ticket is being paid for by the first batch of stablecoin licensees.