Hong Kong advances licensed stablecoins, launches AI fraud system

Hong Kong has advanced stablecoin legislation and introduced an AI-driven anti-fraud platform and new trading infrastructure, according to the Hong Kong Monetary Authority and the Hong Kong Anti-Fraud Alliance. The anti-fraud platform was unveiled at the Hong Kong Web3 Festival 2026 and a prototype trading system was shown at the Google Cloud Stablecoin Hong Kong Forum days earlier.

In its latest annual report, the Hong Kong Monetary Authority listed stablecoins as a top regulatory priority for 2026. The authority said it will align local rules with international norms and promote tokenization of real-world assets so they can settle on blockchain networks using regulated stablecoins. The HKMA wrote that on-chain settlement with regulated tokens should speed and simplify financial transactions.

The anti-fraud platform, built and operated by Z Oracle for the Hong Kong Anti-Fraud Alliance, combines blockchain data analytics with user reporting tools. Users can submit suspicious wallet addresses or webpages for a rapid risk assessment. Victims may upload transaction logs and evidence to support investigations. When multiple users flag the same address, the system automatically classifies it as high risk and cross-checks on-chain data to help relevant organizations act more quickly.

Johnny Ng, a Legislative Council member who helped form the Alliance, told attendees the project has moved from concept to an operational system that improves information flow, provides timely support for victims and raises public awareness. Z Oracle’s founder and CEO, JZ, described the platform as a tool to help organizations make faster, more informed decisions. The advisory board includes former Secretary for Security Lai Tung-kwok and former Police Commissioner Tang King-shing.

Two days before the anti-fraud launch, DeepX and Google Cloud presented a prototype for an AI-native trading infrastructure. DeepX co-founder Sean Chen described the initiative as a unified trading ecosystem designed for automated agents and large-scale institutional trading. Google Cloud will provide security features and cloud compute capacity to handle high-volume, latency-sensitive operations.

Industry participants have reacted to the regulatory and technology developments. Jeremy Allaire, co-founder and CEO of Circle Internet Group, noted Hong Kong is a busy corridor on Circle’s payment network and that transfers into the city are a major route for cross-border settlements. Circle does not plan to issue a Hong Kong dollar stablecoin, but the company seeks a regulatory license to operate USDC in the city as a foreign stablecoin and has formed partnerships with local firms including OSL Group and HKT.

Officials and market participants in Hong Kong have called for clearer rules to support regulated digital finance while addressing risks such as fraud and money laundering. Other financial centers, including Singapore and Dubai, are also pursuing policies to attract digital asset firms.

The anti-fraud system is intended to support investigations and victim recovery by giving law enforcement and industry partners faster access to flagged addresses and associated evidence. The trading infrastructure work focuses on providing compute and security layers needed for automated trading agents and institutional workflows to operate within regulatory frameworks.