The wallet interface is not the basis for assessment; the promise behind the balance is.
The HKMA's explanation of SVFs focuses on stored value and payment uses: the customer pays funds first, the instrument stores the corresponding value, and then, in accordance with the issuer's arrangements, pays for goods or services or transfers funds to other persons. Merely displaying an external bank account balance differs from the platform itself accepting top-ups and undertaking commitments in respect of the use of the balance. Even if the funds are actually held at a partner bank, it is still necessary to ascertain who the instrument issuer is, to whom the customer asserts the balance, and who is responsible for refunds; it is not enough to look only at whether the money has entered an account in the platform's name.
Single-purpose, non-stored-value and multi-purpose should be identified separately
The HKMA has made clear that multi-purpose stored-value instruments fall within its licensing regime; single-purpose instruments that can only be used to purchase the issuer's own goods or services, and payment methods without a stored-value function, are treated differently. Suppose a software vendor collects prepayments that can only be used to purchase its own subscription services; this is a different structure from a wallet balance that can be used to pay multiple independent merchants. Calling multiple merchants "ecosystem partners" does not automatically turn a multi-purpose instrument into a single-purpose instrument; where an exemption applies, the statutory conditions must still be checked item by item.
A fiat wallet combined with stablecoins cannot be subject to a one-off licensing analysis only
Once stablecoin top-ups, conversions and on-chain withdrawals are supported, the product may raise issues of offers of specified stablecoins, virtual asset trading or custody. Although SVF licensees are included in the category of permitted providers under the Stablecoins Ordinance, this does not mean that their existing product approvals and licensing conditions automatically cover the newly added services, nor does it mean that they may offer any overseas stablecoin to retail customers. Conversely, a stablecoin issuance qualification cannot replace the assessment of the wallet's stored-value structure.
Decide in advance how balances are protected and exited
The HKMA's SVF licensing guidance focuses not only on application materials but also on ongoing compliance with licensing conditions and the management of stored-value funds. Teams are advised to set out, at the product design stage, the complete path for top-ups, payments, refunds, incomplete transactions and account termination, and in particular to clarify whether the balance is a fiat currency claim, a token held in custody, or an external asset displayed for information only. If customers believe they can withdraw Hong Kong dollars at any time, while the platform can in fact only return stablecoins whose price or redemption arrangements differ, this is not merely a naming issue; it also affects the contractual and funding arrangements.
Recommended actions
- Map the fund flow from top-up to refund, and identify item by item the issuer, the debtor of the balance, the custodian and the permitted payees.
- If intending to rely on the single-purpose or other exemptions, list the specific basis and verify it against the actual merchant structure and payment functions.
- Communicate the proposed wallet model to the HKMA, and prepare explanations of stored-value funds management, customer terms and the newly added stablecoin functions.
Information note: This article provides general information and does not replace legal advice based on specific facts.
References
- Explanatory Note on Licensing for Stored Value Facilities — Hong Kong Monetary Authority
- e-Wallets and Prepaid Cards — Hong Kong Monetary Authority
- Explanatory Note on Licensing of Stablecoin Issuers, section 2.10 — Hong Kong Monetary Authority
- LCQ10: Regulation of digital assets, 10 September 2025 — Hong Kong Government
