EX.IO & Payment Asia explore Hong Kong stablecoins

EX.IO has signed a memorandum of understanding with Payment Asia to explore the use of regulated stablecoins in Hong Kong.

The partnership will examine payment, custody, trading and merchant applications for licensed stablecoins, with a focus on services for issuers and businesses in the territory.

The agreement comes as Hong Kong advances its stablecoin regime and the market prepares for licensed issuance and wider commercial use. The two groups aim to build infrastructure that links digital asset trading to payment acceptance and settlement.

Under the proposed arrangement, EX.IO would provide custody for licensed stablecoins held through Payment Asia after those assets are traded on its platform. The companies also plan to assess subscription and trading between licensed stablecoins and fiat currencies, including the US dollar and the Hong Kong dollar.

Merchant focus

A second area of cooperation is merchant acquiring. Payment Asia, which serves merchants across Asia, is expected to contribute its merchant network and operational capabilities, while EX.IO would provide digital asset trading and custody services.

The goal is to provide merchants with stablecoin payment and settlement options through a process that spans from acquisition to settlement. The structure could also help improve payment processing and reduce transaction costs.

EX.IO is a licensed virtual asset trading platform in Hong Kong. It has systems in place for anti-money-laundering controls, know-your-customer checks, and custody arrangements, which it views as a foundation for supporting local stablecoin trading and related services.

Founded in 1999, Payment Asia provides online and offline payment services to businesses ranging from small companies to multinationals. Its offerings include card payments, e-wallets and multi-channel payment arrangements, and it has expanded into related services such as eCommerce support and digital marketing.

Regulatory shift

The agreement was announced as Hong Kong's regulatory framework for stablecoins entered a new phase. The Hong Kong Monetary Authority has issued two stablecoin issuer licences, a step market participants see as marking the sector's next stage.

The companies also cited investment bank estimates valuing Hong Kong's stablecoin market at about USD $16 billion, or around HKD $125 billion, with scope for further growth if supply, demand and on-chain activity rise.

For EX.IO, the arrangement supports its ambition to expand the range of assets and services on its platform. For Payment Asia, it offers a way to test how stablecoins could fit into merchant acceptance and settlement in a regulated environment.

Chen Wu, Co-founder and Chief Executive Officer of EX.IO, said the timing was significant for the local market.

"The issuance of Hong Kong's inaugural licensed stablecoin marks a significant and positive milestone for the local digitalasset ecosystem. The current timing of EX.IO's strategic partnership with Payment Asia is exceptionally opportune. Through a comprehensive suite of full-chain services - including subscription, trading, exchange, custody, and wealth management for licensed stablecoins - the two parties will collaborate to establish a seamless, one-stop ecosystem spanning from product offering to practical, real-world implementation," said Wu

"Looking ahead, EX.IO remains committed to deepening cooperation with all relevant stakeholders to provide secure, efficient, and premium user experiences in relation to licensed stablecoins and other digital assets in Hong Kong. This ongoing effort will further reinforce the city's position as a preeminent international hub for digital assets," he added.

Payment Asia said the partnership would enable it to combine its merchant acquiring experience with EX.IO's role in digital asset trading, helping to connect trading activity with payment use cases in the local economy.

"Payment Asia has always been committed to leading innovation in the payment industry. This strategic partnership with EX.IO marks a crucial step forward in building a licensed stablecoin application ecosystem. By combining EX.IO's compliance strengths in the digital asset space with our deep experience in payment acquiring, we are confident in creating a closed-loop stablecoin infrastructure from trading to payment for the Hong Kong market, enabling the real economy to more effectively access the opportunities of the digital asset era." said Paul Tang, Chief Operating Officer of Payment Asia.