The Hong Kong Monetary Authority and Bank Negara Malaysia have agreed to establish a policy-focused workstream on compliant cross-border stablecoin use cases. The decision followed a 2 October bilateral meeting and was announced on 6 October alongside wider cooperation on tokenisation, digital money, capital-market connectivity, local-currency use and Islamic finance.[1]
The workstream creates a channel for the authorities to develop the regulatory, monetary and operating basis for a cross-border token. Its policy status is significant: no issuer, token, reserve design, redemption model, joint licence or product launch timetable has been announced. A resulting use case will need to meet the applicable rules in each jurisdiction.[1]
Digital money joins a wider set of infrastructure commitments
Bilateral digital-finance workstreams
| Area | Agreed action |
|---|---|
| Cross-border stablecoins | Joint policy-focused workstream for compliant use cases between Hong Kong and Malaysia.Source 1 |
| Tokenisation and digital money | Policy and regulatory exchange between the two jurisdictions.Source 1 |
| Market connectivity | Promote bilateral local-currency use, improve RTGS connectivity and explore a CMU–RENTAS central-securities-depository link.Source 1 |
| Islamic finance | Cooperation to foster market development.Source 1 |
| Regulatory cooperation | Strengthen cross-border cyber resilience and anti-scam and anti-fraud arrangements.Source 1 |
Malaysia is not starting from a blank page. BNM’s Digital Asset Innovation Hub was established in June 2025 as a controlled co-creation platform for blockchain-based financial applications. Its priority use cases include tokenised deposits, ringgit-backed stablecoins, programmable payments and supply-chain finance. Participation in testing does not itself confer permission to offer the product to the public.[3]
Malaysia’s related 2026 testing programme
| Measure | Value | Context |
|---|---|---|
| Initiatives onboarded | Three | The tests cover real-world applications involving ringgit stablecoins and tokenised deposits.Source 2 |
| Use-case focus | Wholesale domestic and cross-border payments | Some work also addresses settlement of tokenised assets.Source 2 |
| Environment | Controlled collaboration | Financial institutions, corporate clients, ecosystem partners and other regulators can participate under defined testing parameters.Source 2Source 3 |
| Policy objective | Greater clarity by end-2026 | BNM says the testing will inform its direction on ringgit stablecoins and tokenised deposits.Source 2 |
Existing cooperation covers oversight of the RENTAS–USD CHATS payment-versus-payment and delivery-versus-payment links. That gives the authorities an established route for information sharing, alongside the new work on RTGS connectivity and a possible CMU–RENTAS CSD link. The stablecoin workstream will need its own legal and operational design within that wider relationship.[4][1]
Issuance, distribution and settlement have to fit together
The core design questions follow the token through its lifecycle. Issuance establishes the responsible entity and assets backing redemption. Distribution determines which institutions and customers can hold and transfer it. Settlement then connects final payment, conversion and redemption across currencies and operating hours.[1][3][4]
Customer due diligence, sanctions screening, transaction monitoring and cross-border data exchange also need assigned responsibilities. These are practical questions raised by the proposed use cases, rather than published terms of an approved corridor. They explain why policy coordination precedes a customer-facing product.[1][3]
The nearer dated milestone is BNM’s separate plan to provide greater clarity on ringgit stablecoins and tokenised deposits by the end of 2026. The bilateral announcement gives no deadline for a joint pilot or rule proposal.[2][1]
Sources & further reading
- HKMA and Bank Negara Malaysia strengthen bilateral cooperation Hong Kong Monetary Authority · 6 Oct 2026 · Accessed 16 Oct 2026
- Digital Asset Innovation Hub 2026 strategy for ringgit stablecoins and tokenised deposits Bank Negara Malaysia · 11 Feb 2026 · Accessed 16 Oct 2026
- Digital Asset Innovation Hub Bank Negara Malaysia · Accessed 16 Oct 2026
- BNM cooperative oversight arrangements with HKMA Bank Negara Malaysia · Accessed 16 Oct 2026