HKDAP poised to expand Hong Kong dollar use beyond payments into on‑chain finance

HashKey senior researcher Tim Sun sees Hong Kong’s regulated stablecoin HKDAP moving beyond simple payments to serve as an on‑chain settlement vehicle for a range of financial activities.

Beyond payments: potential use cases

Sun identifies three primary areas where tokenized HKD could add value:

• Cross‑border settlement – leveraging Asia’s large capital flows and multi‑currency needs.
• Corporate treasury management – enabling efficient fund allocation across time zones.
• Tokenized financial assets – providing a compatible on‑chain currency for subscription, redemption and settlement of digital securities.

Early institutional pilots

Insurance has become the first sector to test HKDAP. On 14 August, HashKey Exchange completed a live transaction with YF Life Insurance International, covering the stablecoin’s subscription and redemption processes. YF Life plans to use HKDAP for premium payments, subject to regulatory approval. A similar partnership with insurer OneDegree is also under exploration.

Trade‑finance infrastructure provider Unloq used HKDAP on 13 August to settle a receivables‑financing transaction, creating a blockchain representation of the invoice and using the stablecoin for settlement.

Institutional distribution expanding

Since the beta launch on 12 August, several banks and fintech firms have joined the authorized distributor network, including:

• Standard Chartered Bank (Hong Kong) – first bank distributor, working on fund settlement and treasury applications.
• Finloop, Yunfeng Financial and Bank of East Asia – added in the latter half of August.

Anchorpoint, the token issuer, remains in a controlled rollout, with minting, redemption and fiat conversion available only to eligible institutions and professional investors.

Regulatory backdrop

HKDAP operates under Hong Kong’s Stablecoins Ordinance, which took effect in August 2025. The Hong Kong Monetary Authority granted the first stablecoin issuer licences to Anchorpoint and HSBC in April 2025, imposing reserve, redemption and governance requirements. Tokens are pegged 1:1 to the Hong Kong dollar and must be fully backed by a reserve pool held in trust.

Sun notes that a domestic HKD stablecoin could reduce long‑term reliance on U.S. dollar‑denominated stablecoins in on‑chain finance, contrasting with the United States’ pending federal framework for payment stablecoins.