The Hong Kong Monetary Authority (HKMA) is facing pressure to expand its stablecoin rules, despite issuing initial licenses to banks. Industry experts feel the regulator’s cautious approach fell short of market expectations.

The Hong Kong Monetary Authority (HKMA) is being urged to go further in loosening restrictions on stablecoins, after granting the city’s first two licences to banks to issue the digital currency. Bankers, venture capitalists and analysts said the long-awaited approvals – awarded to HSBC and a joint venture led by Standard Chartered – fell short of market expectations, underscoring the regulator’s cautious stance amid lingering risk concerns. “It came as a surprise that only two licences were...