HSBC and a joint venture led by Standard Chartered have been awarded Hong Kong’s first stablecoin issuer licences, marking the city’s latest step towards embracing cryptocurrency’s most-traded cash substitute in its bid to become a global digital asset hub.

Eight months after Hong Kong’s Stablecoin Ordinance, one of the world’s first such laws, took effect, HSBC and Anchorpoint Financial, the Standard Chartered-led group, received the green light from the Hong Kong Monetary Authority (HKMA) on Friday.

“The two applicants have experience in traditional finance and risk management, which fits the mission of stablecoins that aim to bridge traditional finance and digital finance,” said HKMA deputy chief executive Darryl Chan.

HSBC said on Friday that it would launch its Hong Kong dollar stablecoin in the second half of this year, integrating it into its PayMe and mobile banking platforms. The initial phase will support peer-to-peer (P2P) transfers and peer-to-merchant payments. Additionally, customers will be able to use stablecoins to subscribe to tokenised investments via the app.

HSBC Hong Kong CEO Maggie Ng said the stablecoins would not pay interest, but would allow fast settlement, while the bank or merchants could offer awards to encourage usage. Next year, HSBC could expand to stablecoins pegged to other currencies, she added.