Hong Kong’s ambitious push to establish itself as a regulated digital-asset hub has encountered an uncomfortable early test after an independent security review raised serious concerns about HKD At Par (HKDAP).
The city’s first regulated Hong Kong-dollar stablecoin to reach the market. The token, launched by Anchorpoint Financial on August 12, 2026, was designed to demonstrate how regulated digital money could support payments, settlement and tokenized financial products.
The timing makes the criticism particularly significant. Hong Kong has spent considerable effort building a formal stablecoin framework intended to distinguish regulated digital currencies from the loosely supervised tokens that have dominated much of the global cryptocurrency market.
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The Stablecoins Ordinance took effect in August 2025, and the Hong Kong Monetary Authority (HKMA) subsequently granted licences to only two issuers in April 2026 after receiving 36 applications.
Anchorpoint is backed by major institutions including Standard Chartered, Animoca Brands and Hong Kong Telecommunications.
Its HKDAP stablecoin is intended to maintain a one-to-one relationship with the Hong Kong dollar and initially targets institutional distributors and professional investors rather than the mass retail market. The company has emphasized practical applications such as commercial payments and financial settlement.
However, a review conducted by blockchain security firm BlockSec has challenged the technical readiness of the live smart contract. According to the review, HKDAP’s deployed contract contains weaknesses involving its know-your-customer controls and governance architecture.
BlockSec reported that some KYC and revocation mechanisms do not function as intended, while a single key has the ability to mint, burn, pause or freeze tokens. The firm concluded that the contract was “not production-ready.”
For a stablecoin, these findings are particularly consequential because security is inseparable from trust. A stablecoin promises users that digital representations of fiat currency can be issued, transferred and redeemed under clearly defined rules.
If administrative keys are excessively concentrated or compliance mechanisms do not operate as expected, users and institutions must consider risks beyond the stability of the underlying currency.
The issue also creates an awkward regulatory question.
Hong Kong’s stablecoin regime was specifically designed around reserve management, redemption arrangements, technology security, risk management and other safeguards. Government statements have repeatedly emphasized that licensed issuers must meet stringent standards before launching.
Importantly, the security review does not necessarily mean HKDAP has lost its Hong Kong-dollar peg or that customer reserves have disappeared. The criticism is primarily about the implementation of the blockchain contract and its controls. That distinction matters because technical vulnerabilities and reserve insolvency are different categories of stablecoin risk.
The episode could influence how Hong Kong’s regulators and institutional market participants approach future launches. If regulated stablecoins are intended to become financial infrastructure, their smart contracts must receive scrutiny comparable to traditional financial systems.
Particularly where token issuance, redemption and administrative powers are involved. Hong Kong’s experiment is therefore entering a crucial phase. The city has succeeded in creating a regulatory framework and attracting heavyweight financial institutions.
But regulation alone cannot guarantee technological resilience. HKDAP’s early security controversy demonstrates that institutional credibility must extend from the licence and reserve structure all the way down to the code.
For Hong Kong’s stablecoin ambitions, the lesson is straightforward: being licensed is only the beginning of proving that a digital currency can be trusted.