A Hong Kong company puts up stablecoins as collateral for a corporate credit card. An employee uses the card to pay a HK$12,000 supplier invoice. The supplier receives Hong Kong dollars through the card network, and the company owes HK$12,000 to the lender. The tokens stay in the collateral wallet until the company repays or the collateral is applied under the agreement.
That is one way a stablecoin-linked credit card can work in Hong Kong. If the same card draws down a balance the company topped up in advance, the legal analysis changes. It changes again if the app sells customers the tokens they need to post as collateral. A sponsor can provide the card network membership for a programme run by another business. The agreements and the way the product works establish who lends, who controls the collateral and who sells or converts the tokens.
When a card extends credit or stores value
If the company still owes the HK$12,000 after the supplier has been paid, start by identifying the lender. Under the Money Lenders Ordinance (Cap. 163), a business that carries on money lending generally needs a licence unless an exclusion applies. Section 3 excludes authorized institutions under the Banking Ordinance. Schedule 1 separately excludes their subsidiaries from the definition of money lender.
Two exemptions in Part 2 of Schedule 1 often merit a closer look. Paragraph 3 covers a loan by a company under a bona fide credit card scheme that it operates, to a holder of a card issued under that scheme. In a sponsored programme, identify who makes the loan and who operates the scheme before relying on this exemption. Paragraph 12 covers loans to companies with at least HK$1 million in paid-up share capital or its equivalent in an approved currency. Check the capital of the actual borrower.
The credit card exemption alone leaves sections 24 and 25 in place. Where those sections apply, the effective annual interest ceiling is 48%. A rate above 36% is presumed extortionate. A court can displace that presumption only if the rate stays within the 48% ceiling and is not unreasonable or unfair. The effective rate is calculated under the Ordinance and can include fees. Paragraph 12 loans are separately excluded from both sections. If the lender needs a licence, check the conditions attached to it. Some of the August 2026 conditions specifically address unsecured personal lending, so their scope differs from that of a secured corporate card.
Now suppose the HK$12,000 comes out of a balance the company has already funded. Under the Payment Systems and Stored Value Facilities Ordinance (Cap. 584), a stored value facility can arise when a customer pays money into a facility, stores the value there and uses it for payments covered by the issuer’s undertaking. If the programme converts stablecoins into a spendable fiat balance, check whether and when money is paid into the facility and who undertakes to honour or make payments. The licensing analysis can extend to a programme manager if its role amounts to facilitating the issue of the facility as defined in the Ordinance.
The Banking Ordinance (Cap. 155) excludes specified stablecoins from its definition of a deposit. If the programme sells collateral and holds the fiat proceeds for the customer, assess that balance separately. Identify who holds the cash, when the customer can demand it back and whether the arrangement could amount to carrying on a deposit-taking business.
When the Stablecoins Ordinance applies to the card app
The Stablecoins Ordinance (Cap. 656) has been in force since 1 August 2025. Sections 5 and 8 generally require a licence to issue a specified stablecoin in Hong Kong in the course of business, or to issue one abroad in the course of business if it references the Hong Kong dollar in whole or in part. Those sections also restrict holding out as carrying on a regulated stablecoin activity, which can include actively marketing the activity to the public in the circumstances set out in section 5. The definition includes stablecoins that purport to maintain a stable value by reference wholly to one or more official currencies and meet the Ordinance’s other criteria. Receiving an existing token as collateral does not in itself amount to issuing one. A programme that plans to issue its own token should review Hong Kong’s stablecoin issuer licensing regime.
Even when the programme issues no tokens, the way customers acquire them can bring it within the offering rules. Under section 6, a business communication can amount to an offer if it gives recipients enough information about the token, the terms and how to acquire it to decide whether to acquire it from the person making the offer. If the onboarding screen lets a customer buy the stablecoin it needs to post as collateral, check who supplies the token and who communicates the offer. Look at referral links and marketing screens too. Sections 9 and 10 separately address offering, holding out as an offeror and knowingly publishing advertisements for prohibited offers.
Under the ordinary section 9 routes, a permitted offeror can offer a token whose issue an HKMA licence authorises. Examples of permitted offerors include authorized institutions, licensed stablecoin issuers and SFC-licensed virtual asset trading platforms. For a token issued outside that route, a permitted offeror can offer it only if its issue is not prohibited by section 8 and the offeree is within the class specified by Gazette notice, currently professional investors. Separate statutory exemptions may apply. Incorporation alone does not make a customer a professional investor. A regulated partner’s involvement also does not settle who makes the offer on the app.
The SFC’s May 2026 circular covers certain services involving specified stablecoins issued and authorised under an HKMA licence. Licensed platforms and corporations still need to check their permissions and the applicable conditions, including disclosure and suitability where relevant. The HKMA’s guidance for authorized institutions calls for advance discussion of planned dealing, advisory or portfolio management services involving those stablecoins. Check the specific token and the partner’s permissions before building a purchase feature around them.
Who holds and converts the collateral
Find out who controls the collateral wallet, who can authorise a sale and where the cash goes. Under the HKMA’s custody guidance, an authorized institution planning to provide digital asset custody itself or, where applicable, through a subsidiary should discuss the plans with the HKMA in advance. Labelling the collateral arrangement a title transfer may not, by itself, settle whether custody rules apply. A bank sponsor that delegates onboarding or servicing should also check the HKMA’s outsourcing guidance. Analyse any fiat currency exchange or cross-border remittance separately under the money service operator regime.
Hong Kong is also considering wider licensing rules for virtual asset dealing, custody, advisory and management services. In its 4 November 2026 reply to LegCo, the Government said it planned to introduce a bill by the end of 2026. That is a target for introducing the bill. The proposed requirements do not yet apply.
Know who is behind the wallet
Customer checks should follow the transaction. The party monitoring the HK$12,000 purchase should be able to link it to the corporate customer and its collateral wallet, then trace any sale of tokens and return of surplus funds. Identify who verifies beneficial owners, checks the source of funds where required and investigates an alert. Where stablecoin transfers are involved, check who owns or controls the sending wallet and whether transfer-information requirements apply to the participant handling the transfer. The applicable rules depend on each participant’s role and status. Licensed money lenders, for instance, follow anti-money laundering guidance through a condition of their licence. An institution relying on an intermediary under Schedule 2 to Cap. 615 retains responsibility for due diligence. The duty to report suspected criminal proceeds can also apply to unlicensed participants.
What issuers and sponsors should map before launch
Run one purchase through the proposed programme, then run it again with a missed repayment. At each step, record who has the tokens or cash, who can move them, who owes money and what the customer sees in the app. Compare the result with the credit agreement, collateral terms and sponsorship agreement. If the programme manager can instruct the sale of collateral, put that on the map even if the sponsor issues the card.
If you are discussing a card programme with TITUS’s fintech team, bring the transaction map and the onboarding screens. A gap between the two is much easier to fix before the contracts and app are final. Book a consultation to discuss the proposed structure.
This article provides general information on Hong Kong law as at 6 November 2026. It does not constitute legal advice or create a solicitor-client relationship.