Banking giants HSBC and Standard Chartered are expected to be among the first institutions to receive stablecoin issuer licenses in Hong Kong, marking a major step in the city’s effort to build a regulated digital-asset ecosystem.

Hong Kong poised to grant first stablecoin licenses to HSBC, Standard Chartered

The approvals, which could come within weeks, would allow banks to issue stablecoins under Hong Kong’s new regulatory regime overseen by the Hong Kong Monetary Authority (HKMA), according to Bloomberg sources.

Hong Kong introduced its stablecoin licensing framework through the Stablecoin Ordinance, which took effect in 2025 and requires issuers of fiat-referenced stablecoins to obtain regulatory approval. The law is part of the city’s broader push to position itself as a global hub for digital assets while ensuring financial stability and investor protection.

Officials have said only a limited number of licenses will be granted in the first round after regulators reviewed dozens of applications. Sources said as many as 36 firms initially expressed interest in obtaining stablecoin issuer permits.

Standard Chartered has already signaled plans to issue a Hong Kong dollar-pegged stablecoin through a joint venture, while HSBC’s potential approval is notable because the bank did not participate in the HKMA’s earlier stablecoin sandbox program used to test prospective issuers.

The move highlights Hong Kong’s attempt to strike a balance between innovation and regulation as traditional financial institutions increasingly explore blockchain-based payment systems.

Stablecoins, cryptocurrencies designed to maintain a stable value by being pegged to fiat currencies or other assets, are widely used in digital-asset markets and are increasingly being considered for cross-border payments and financial settlements.

Hong Kong’s regulatory push comes amid intensifying competition among global financial centers to attract crypto firms and digital-asset investment.

Opinion by: David Azubike, lead analyst at Blocksquare

Prediction markets are no longer an experimental corner of crypto. Data now shows something durable: a financial category with sustained volume, diversified participation and increasing institutional attention. Prediction markets are emerging as a new “arbitrage arena” for crypto traders.

Monthly notional volume in prediction markets scaled to more than $13 billion by late 2025 from less than $100 million in early 2024 as markets diversified across verticals, according to a joint research report from Dune and Keyrock. 

The implication is straightforward: Prediction markets have scaled beyond their breakout moment. Despite recent regulatory action seeking to restrict prediction markets, trading volumes have continued to rise.

As the category matures, the primary risk is shifting. Liquidity and user acquisition are no longer the binding constraints; trust is.

An important layer of trust, separate from regulation and custody, is resolution.

Resolution becomes the bottleneck

Resolution architecture matters because the category is expanding into increasingly contentious domains.

Sports markets routinely involve edge cases around officiating, timing and data sources. Political markets hinge on definitions, certification procedures and legal interpretation. Macro markets depend on methodology changes and release schedules.

As the surface area grows, so does the frequency of contested outcomes.

When resolution is opaque or discretionary, engagement declines quietly. When resolution is adversarial and economically secured, users begin to treat it as financial infrastructure.

This mirrors earlier transitions in crypto. Custody, execution and liquidation were once product features. Over time, they became system properties that institutions expected to be predictable and auditable.

Resolution is undergoing the same transition in prediction markets.

Resolution as infrastructure

Every prediction market makes the same promise. Traders buy conditional claims on a future outcome, and the system must deterministically convert those claims into redeemable value once the event has occurred. If that conversion is slow, ambiguous or discretionary, traders price in resolution risk. When resolution risk becomes material, serious capital concentrates in only a handful of headline markets and avoids the rest of the venue.

This is why resolution architecture is becoming a very important layer in the modern prediction stack.

In most designs, a market is created and linked to a specific oracle question with explicit resolution criteria. Users trade YES or NO outcome tokens that represent conditional claims. These claims are typically implemented using conditional token standards that can only be redeemed after the oracle finalizes an outcome.

Related: Crypto.com launches standalone prediction market app ‘OG’

Once the event has occurred, an answer is proposed to the oracle. Optimistic oracle designs assume correctness by default, but require the proposer to post a bond. This bond creates a financial cost to submitting an incorrect answer.

A fixed challenge window then opens. During this period, anyone can dispute the proposed outcome by posting a larger bond. Each challenge increases the bond size, raising the economic cost of manipulation.

If no dispute occurs, the oracle finalizes the answer and the market settles. If a dispute does occur, the case escalates to arbitration, where decentralized jurors rule on the outcome and the decision is enforced back into the oracle state.

From product feature to trust anchor

As prediction markets mature into information infrastructure, trust shifts away from interfaces and incentives toward resolution as architecture: the set of rules, bonds, challenge windows and arbitrage paths that deterministically convert outcomes into enforceable settlement.

The next wave of growth will not be won by whoever acquires the most first-time traders during a single headline event. It will be won by whoever builds infrastructure where resolution is as reliable as execution.

For builders, this changes the core engineering and governance priorities. Resolution rules must be explicit before markets go live, not retrofitted after disputes emerge. Question design must minimize ambiguity at creation, not rely on discretionary judgment at settlement. Bond sizes and challenge windows must scale with open interest, not remain static as markets grow. Arbitration paths must be predictable and enforceable. And resolution latency must be treated as a core product metric, not an operational afterthought.

When these properties are engineered deliberately, prediction markets stop behaving like speculative products and begin functioning as financial systems people rely on.

Opinion by: David Azubike, lead analyst at Blocksquare