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Weekly briefing · Edition 10 · 5 July 2026 · covering 29 June to 5 July

FSTB and HKMA confirm Hong Kong's tokenised bond legal footing, signal intent to advance DLT settlement

Edited by Cliffton Lee · Singapore · 7 items covered from 146 sources reviewed

Key points
  • Open Standard launched Open USD (OUSD) on 30 June with more than 140 initial partners including Visa, Mastercard, Stripe, BlackRock and BNY, sharing reserve income with participating businesses rather than concentrating it with a single issuer; Circle is absent from the partner list.
  • Standard Chartered and BNY both moved USDC deeper into G-SIB infrastructure in the same week: Standard Chartered launched integrated minting and redemption through its own banking relationship, and BNY added direct institutional mint and burn to its Digital Asset Custody platform, positioning USDC as eligible collateral for institutional margin and funding desks.
  • JPMorgan's Umar Farooq and Peter Muriungi published an op-ed warning that yield-like stablecoin incentives without bank-grade standards risk recreating shadow-banking vulnerabilities, a framing that sits squarely against Open USD's revenue-sharing design.
  • The Bank of England and FCA published a joint framework for systemic stablecoin issuers, with no single authority holding veto power and systemic designation reading as a one-way door.
  • Hong Kong's FSTB and HKMA confirmed DLT-maintained debenture registers already satisfy Companies Ordinance requirements and signalled intent to advance tokenised bonds via DLT further, with a Q3 consultation on the settlement framework and second-half legislative work on document execution ahead.

Covering 29 June to 5 July 2026. The structural signal this week is stablecoin infrastructure hitting an inflection point on two fronts at once: challenger economics and incumbent scale. Open Standard, backed by Visa, Stripe, Mastercard, BlackRock, and more than 140 other companies, launched Open USD, a stablecoin that shares reserve income with partners rather than concentrating it with a single issuer, while Standard Chartered and BNY separately moved USDC deeper into G-SIB settlement and custody infrastructure, the two clearest signs yet that an incumbent stablecoin is becoming production-grade collateral rather than a peripheral instrument. JPMorgan's payments and digital-assets leadership used the same week to publish a policy stance warning that yield-like stablecoin incentives risk recreating shadow-banking vulnerabilities, a tension that sits squarely against Open USD's own revenue-sharing design. Hong Kong and UK regulators both moved the policy perimeter forward: Hong Kong's FSTB and HKMA confirmed the territory's existing law already supports tokenised bond issuance and signalled intent to advance DLT settlement further, while the BoE and FCA jointly published the framework for systemic stablecoin issuers.

What's new in Asia

  1. FSTB and HKMA confirm Hong Kong's tokenised bond legal footing, signal intent to advance DLT settlement ↗

    HK

    The Companies Registry issued FAQs confirming that DLT-maintained debenture holder registers already satisfy Companies Ordinance requirements, closing a standing legal-certainty question for tokenised bond issuers, while a joint FSTB-HKMA statement framed the next phase for tokenised fixed-income issuance, building on the SFC's uncertificated-securities guidance published in May. The second-half 2026 phase of the joint review turns to electronic execution of tokenised bond issuance documents and the legal concepts of possession and transfer for tokenised fixed income instruments, building on three government tokenised bond issuances to date including the November 2025 e-HKD/e-CNY offering; a consultation on the DLT-settlement framework for government and corporate bonds is expected in the third quarter.

  2. Kinexys expands Blockchain Deposit Accounts to five new APAC currencies ↗

    Regional

    JPMorgan's tokenised-deposit infrastructure now covers eight currencies, adding five APAC denominations to the existing USD, EUR, and GBP rails. The expansion enables 24/7 institutional payments, on-chain FX, and programmable treasury across all major markets. The announcement does not specify which five APAC currencies, but JPMorgan's existing regional footprint suggests SGD, HKD, JPY, AUD, and one of KRW or CNY are the likely additions. The operational read is that Kinexys is building the multi-currency settlement backbone for cross-border tokenised-asset flows before the asset side reaches scale, which is the correct sequencing for institutional adoption. Expect the first cross-currency tokenised-bond settlement using Kinexys rails in Q3 or Q4 2026.

Global news

Payments & settlement

  1. Open Standard launches Open USD, a shared-governance stablecoin backed by Visa, Stripe, Mastercard, BlackRock, and 140-plus partners ↗

    Global

    Covered in the deep dive above.

  2. Standard Chartered and Circle launch first G-SIB-led integrated access to USDC minting and redemption ↗

    Global

    Eligible institutional clients can now mint and burn USDC through their existing Standard Chartered relationship rather than a separate Circle account, the first time a G-SIB has integrated stablecoin minting and redemption into its own client-facing infrastructure. The integration preserves the bank's balance-sheet and compliance wrapper: AML, KYC, and sanctions screening run through Standard Chartered's own systems, and USDC held this way is a deposit claim on the bank rather than a direct claim on Circle's reserves. The bank's existing tokenised-deposit infrastructure, live in Singapore since late 2024, reads as the likely initial geography, though the announcement does not specify jurisdictional rollout.

  3. BNY integrates USDC into Digital Asset Custody platform ↗

    US

    USDC becomes the first stablecoin on BNY's production custody platform, enabling institutional clients to store, transfer, mint, and burn USDC through the same custody relationship they use for conventional securities. BNY is the world's largest custodian, with USD 52.1 trillion in assets under custody and administration as of Q1 2026, and this integration positions USDC as eligible collateral for institutional margin and funding desks that already use BNY for custody and settlement. The operational read is that this removes the custody friction that has kept stablecoins out of institutional treasury operations, since allocators and treasury teams can now hold USDC through an existing G-SIB custodian relationship rather than onboarding a separate crypto custodian. Expect the first tokenised money-market fund using BNY-custodied USDC as the cash-management layer before year-end.

Regulatory & licensing

  1. Bank of England and FCA publish joint framework for systemic stablecoin issuers ↗

    GB

    The Bank of England and Financial Conduct Authority's joint approach document establishes the operational requirements, supervisory responsibilities, and systemic-risk thresholds for stablecoin issuers that reach systemic scale in the UK. The framework distinguishes systemic issuers (those whose failure or operational disruption would threaten financial stability) from non-systemic issuers, with systemic designation triggering BoE supervision, FCA conduct oversight, and enhanced prudential requirements including liquid-asset buffers and operational-resilience standards equivalent to payment-system operators. Systemic designation is a forward-looking judgement based on market share, interconnectedness, and substitutability rather than a bright-line threshold, and appears to be a one-way door: dual supervision persists even if an issuer's market share later contracts. The operational read is that Circle and Tether will be the first systemic designations if they seek UK authorisation, and that the framework establishes the UK as a leading jurisdiction for regulated stablecoin issuance alongside the EU's MiCA regime and Singapore's PSA stablecoin framework.

  2. JPMorgan Payments and Digital Assets leadership back US market-structure clarity, warn on stablecoin "shadow banking" risk ↗

    US

    Umar Farooq and Peter Muriungi's op-ed, timed to the CLARITY Act debate in Congress, argues that yield-like stablecoin incentives without bank-grade capital and consumer-protection standards risk recreating shadow-banking vulnerabilities, and reaffirms Kinexys and JPM Coin as the bank's reference point for risk-managed digital-asset infrastructure. This reads as policy positioning from a GSIB in the middle of a legislative debate rather than an operational announcement.

The deep dive

Open USD: a shared-governance challenge to single-issuer stablecoin economics

Open Standard, a newly formed independent organisation, launched Open USD (OUSD) on 30 June with more than 140 initial partners, including Visa, Mastercard, American Express, Stripe, BlackRock, BNY, Standard Chartered, Coinbase, Google, Shopify, and IBM. Bridge co-founder Zach Abrams is Open Standard’s founding chief executive. The mechanism is the story: businesses mint and redeem Open USD without fees or volume limits, and most of the income earned on the reserve assets backing it flows back to participating businesses after a small management fee, rather than being captured entirely by a single issuer the way Circle captures USDC’s reserve yield or Tether captures USDT’s. Governance is shared across partner companies instead of sitting with one accountable issuer.

That structure is the direct economic challenge. USDC and USDT are worth roughly what they are to Circle and Tether because the issuer keeps the interest on tens of billions of dollars of short-dated Treasuries and cash. Open USD proposes to give that yield to the businesses that actually move the stablecoin, in proportion to adoption. For the card networks in the initial partner set, that is a materially different commercial calculation than simply accepting stablecoins as a settlement rail: Visa, Mastercard, and Amex are agreeing to a structure where their own adoption of Open USD earns them a direct share of reserve income, which reads as a genuine balance-sheet commitment rather than a logo on a press release. BlackRock and BNY’s participation extends the same institutional-adoption pattern already visible in BUIDL and BNY’s own Digital Asset Custody platform: regulated balance sheets appear willing to back non-bank dollar instruments when the governance and yield terms favour them directly.

Circle’s absence from the initial partner list is the pointed detail. Open USD is not positioned as another stablecoin competing on distribution or chain support; it is positioned as a different answer to who captures stablecoin economics, and Circle is the incumbent that answer is aimed at. The irony is that BNY sits on both sides of this story in the same week: on 29 June it deepened its role as a primary custodian for Circle’s USDC, adding direct institutional mint and burn to its Digital Asset Custody platform, and the following day it joined the consortium building the instrument designed to challenge USDC’s economics. That looks less like a contradiction than a custodian bank reading that the winning stablecoin model is not yet settled and positioning itself as infrastructure for either outcome rather than picking a side.

JPMorgan‘s 29 June policy op-ed, published separately from either announcement, reads differently once set against Open USD’s design. Umar Farooq and Peter Muriungi warned that stablecoin products offering “yield like incentives or balance holding arrangements” without bank-grade capital, liquidity, and consumer-protection standards risk recreating shadow-banking vulnerabilities, and argued that labelling matters less than substance: a business holding Open USD balances specifically because doing so earns a share of reserve income is, on that reading, functionally holding a yield-bearing instrument. Open USD is business-to-business rather than consumer-facing, which narrows the direct read-across, but the regulatory question JPMorgan is pointing at (does a reserve-income-sharing stablecoin need the same guardrails as a bank deposit) is exactly the question Open Standard will have to answer before Open USD can operate under the GENIUS Act’s federal non-bank issuer route, or any other accountable-issuer licensing regime built around a single supervised entity rather than a shared-governance consortium.

Hong Kong’s FSTB and HKMA news the same week is a smaller-scale but structurally clean counterpoint: a jurisdiction closing a legal-certainty question (DLT-maintained debenture registers already satisfy the Companies Ordinance) before opening the harder legislative work (electronic execution, possession and transfer of tokenised instruments), rather than launching a headline consortium first and figuring out the accountable-supervision question after the fact. For the stablecoin race broadly, Open USD’s launch without a stated regulatory route is the more common pattern in this space, and the one JPMorgan’s op-ed appears to be implicitly critiquing.

What this means

  • Founder & strategy: treat Open USD’s reserve-income-sharing model as a live competitive test of whether shared governance beats single-issuer economics on the terms that matter to the businesses using the rail, not a settled outcome; the card networks’ participation is the strongest signal yet that reserve yield, not distribution, is the contested ground in stablecoins.
  • Regulatory & policy affairs: Open Standard has not stated a regulatory route for Open USD; get ahead of the accountable-issuer question, since GENIUS Act federal non-bank issuer status and most comparable regimes are built around a single supervised entity, not a 140-plus-company consortium.
  • Treasury & allocator: revisit stablecoin reserve-yield assumptions if your business is positioned to mint or redeem Open USD in volume; the revenue-share structure is a new balance-sheet consideration that neither USDC nor USDT offers.
  • Compliance, legal & risk: JPMorgan’s shadow-banking framing is a preview of the scrutiny a reserve-income-sharing consumer or business stablecoin product is likely to face; map Open USD’s structure against that framing before a client desk asks whether it is a deposit-like product in substance.

Worth watching next

  • Open Standard has yet to state a regulatory route (GENIUS Act federal non-bank issuer, an EMI-style authorisation, or another route) ahead of Open USD’s targeted later-2026 launch; whether any APAC bank beyond Standard Chartered joins the initial partner set is the other marker.
  • Whether Standard Chartered’s USDC integration extends beyond Singapore to Hong Kong and the UAE, and which other G-SIBs follow the single-onboarding model; separately, whether BNY‘s USDC mint-and-burn capability extends to additional stablecoin issuers, per the bank’s stated intent.
  • The BoE and FCA have yet to publish worked examples of how enforcement and crisis-intervention decisions are actually escalated between them; Circle or Tether‘s UK authorisation decision would be the first live test of systemic designation.
  • Hong Kong’s Q3 2026 consultation on the DLT-settlement framework for tokenised government and corporate bonds is the next concrete step in the FSTB-HKMA work programme.
  • Whether JPMorgan discloses the five APAC currencies added to Kinexys Blockchain Deposit Accounts, and the first cross-currency tokenised-bond settlement using Kinexys rails.

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