On August 1, the "Stablecoin Regulation" in Hong Kong will officially take effect.
Written by: Tuo Luo Finance
The wind of stablecoins continues to blow.
On one hand, the genius stablecoin bill has been officially legislated with Trump's signature, while on the other hand, Hong Kong's stablecoin is counting down to its issuance. On the upcoming August 1, the "Stablecoin Regulation" in Hong Kong will officially take effect. Compared to the massive waves stirred up by stablecoins in the U.S., the ripples created in Hong Kong's crypto space may seem minor, but in the stock market, they have shown an astonishing impact.
Since the passage of the stablecoin draft in Hong Kong, enthusiasm for stablecoins in the Hong Kong stock market has surged to unprecedented heights. The stablecoin sector in Hong Kong has seen explosive growth, with many stocks doubling and some even experiencing tenfold increases, much to the delight of investors and listed companies welcoming increased capital. However, amidst this seemingly joyous situation, Hong Kong's regulatory authorities have developed new concerns. Recently, the President of the Hong Kong Monetary Authority, Yu Weiwen, published an article titled "Stablecoins for Sustainable Development" on the official website, aiming to cool down the rapidly rising stablecoin market.
However, facing this boiling kettle, it is indeed quite challenging to lower the temperature.
On May 21, the Hong Kong stablecoin regulation draft was passed in the Legislative Council after a third reading. At that time, since the U.S. stablecoin bill was still under review in the Senate, Hong Kong's "head start" operation sparked heated discussions in the market. In terms of content, the licensing system, 100% full reserves, HKD 25 million paid-in capital, anti-money laundering regulations, etc., are no different from legislation in other mainstream regions. However, in terms of public opinion, the situation is starkly contrasting, becoming a true reflection of Hong Kong's stablecoin landscape.
On one hand, due to Hong Kong's diminishing influence in the crypto space, coupled with many "head start" operations that have made a lot of noise but little impact, the crypto market generally holds a relatively pessimistic view, believing that even if Hong Kong continues to solidify its regulatory foundation and improve its regulations, under limited market demand, it will ultimately just be another appendage to the U.S. dollar stablecoin, merely playing a part in the residual heat of the window.
Despite the crypto market's lack of enthusiasm, this news is extremely favorable in other markets. After the regulation was passed, major companies with keen senses rushed to establish a presence, and traditional media and brokerages competed to report, allowing stablecoins to truly break through and expand their reach. Discussions about the connotation, use cases, and value significance of stablecoins have continued to ferment, gradually extending to debates on the necessity of a renminbi stablecoin, as this trillion-dollar market seems to be on the brink of explosion.
This Friday, the Hong Kong stablecoin regulation will officially take effect, and the application for licenses will be opened simultaneously. However, just a week before the implementation, Yu Weiwen, the President of the Hong Kong Monetary Authority, poured cold water on stablecoins. In his article "Stablecoins for Sustainable Development," he explicitly mentioned that stablecoins are being over-conceptualized and showing signs of bubble formation. Yu pointed out that in the initial stage, at most only a few stablecoin licenses would be issued, urging investors to remain calm and think independently while digesting the market's positive news. Meanwhile, the Monetary Authority will implement regulatory and anti-money laundering guidelines and seek market opinions, establishing stricter requirements in anti-money laundering to minimize the risk of stablecoins being used as tools for money laundering.
From the above statements, it is clear that Hong Kong expresses concerns about the current market situation and maintains a very cautious attitude towards the approval of stablecoin issuer licenses. The reason why regulatory authorities feel the need to publish articles to cool the market is simple: stablecoins in Hong Kong are indeed a bit overheated.
This overheating is concentrated in the stock market. The bright prospects correspond to very early-stage developments, making stablecoins a rather appealing capital story. Under this narrative, almost all stocks associated with stablecoins have experienced rapid increases, with growth effects almost immediate.
In June, Guotai Junan International was approved for a securities trading license, becoming the first Chinese brokerage to provide full-chain services for virtual assets. On June 25, its stock surged by 198%, with an annual increase of 4.58 times.
On July 7, Jinyong Investment announced that it had signed a strategic cooperation framework memorandum with AnchorX, exploring potential cooperation in four areas, including cross-border payments and trade, and the expansion of stablecoin application scenarios. The next day, Jinyong Investment's stock skyrocketed by 533.17%.
On July 15, China San San Media announced that it had begun preparations to apply for a stablecoin license. On July 16, China San San Media's stock closed up by 72.73%, with a cumulative increase of 14.95 times this year.
Just one piece of news can lead to a straight-line surge, demonstrating the strong narrative effect of stablecoins. In addition to the newly added institutions in the sector, existing established concept stocks have also collectively soared, with companies like OKLink, Yunfeng Financial, Yixin Group, New Huo Technology Holdings, and OSL Group all seeing cumulative increases of over 100% this year. Even the long-criticized A-shares have been shaken, with digital renminbi concept stocks like Hengbao Co., Ltd., Sifang Jingchuang, and Chutianlong also experiencing multiple increases.
Against this backdrop, whether it is "chameleon" companies trying to ride the capital effect or financial institutions genuinely wanting to share in the stablecoin pie, or strategic giants aiming to reduce settlement costs and build corporate moats, all are rushing in. As of now, according to Caixin reports, around fifty to sixty companies have expressed interest in applying for Hong Kong stablecoin licenses, including state-owned enterprises and financial institutions from mainland China, as well as internet giants.
However, the enthusiasm for applications does not equate to enthusiasm for approvals. The Hong Kong Monetary Authority stated that among the applying institutions, most are still at the conceptual stage, lacking actual application scenarios, while those with application scenarios lack the technology and experience to issue stablecoins and manage various financial risks. Issuing just for the sake of issuing is clearly not what Hong Kong wants to see, and it is against this backdrop that the Hong Kong Monetary Authority indicated that only a handful of licenses would be issued in the initial phase.
At the same time, in response to the overheated license applications, the Hong Kong Monetary Authority intends to implement a preliminary screening mechanism. According to sources cited by Caixin, the licenses for stablecoin issuers will not be processed through a self-downloading and unified written application submission method, but rather will be arranged in a manner similar to an invitation application system. In practical terms, the Hong Kong Monetary Authority, responsible for regulating the issuance of licenses, will communicate in advance with interested stablecoin license applicants to understand whether they meet the basic application qualifications. Only after obtaining basic approval in the pre-communication will the Monetary Authority issue the application forms.
As for who will ultimately receive the licenses? From the market's perspective, those already participating in the stablecoin sandbox pilot seem to have a greater chance of success. As early as July last year, the Hong Kong Monetary Authority launched the stablecoin sandbox test, with institutions like JD Coin Chain Technology, Yuan Coin Innovation Technology, and the Standard Chartered consortium (including Standard Chartered, Anni Group, and Hong Kong Telecom) being selected. Now, the sandbox test has entered its second phase. Although the Monetary Authority emphasizes that being selected for the sandbox does not guarantee a license, and sandbox companies must also apply for licenses according to regulations, given the application scenarios and risk control foundations tested in the sandbox, participants in the sandbox clearly have more insights on how to meet regulatory requirements.
Overall, Hong Kong places significant emphasis on three main aspects in the license application process: first, the technical implementation capability, whether the issuer meets the technical requirements for issuance; second, the demand for application scenarios, requiring actual plans and implementation scenarios; and third, risk control capability, especially in preventing money laundering risks associated with stablecoins. Objectively speaking, large enterprises with a broad foundation in cross-border finance and payment business and a complete risk control system have advantages, while the success rate of applications from small and medium-sized enterprises is quite bleak, often playing a supporting role.
At this stage, although the Monetary Authority is calling for a cooling down, the market's FOMO (Fear of Missing Out) is unlikely to drop sharply anytime soon.
First, there is a certain linkage between the development of stablecoins in the U.S. and Hong Kong. After the passage of the genius bill, the enthusiasm for stablecoins in the U.S. remains unabated, with Circle continuously reaching new highs, and large institutions expressing high interest. Coupled with the positive sentiment in the crypto market and the anticipated interest rate cuts, U.S. stablecoins are expected to continue their narrative, which has a transmission effect.
Second, discussions about stablecoins in Hong Kong continue to extend. Initially, the market only discussed the Hong Kong dollar stablecoin itself, but now, more discussions are focusing on the necessity of an offshore renminbi stablecoin. National think tanks like the National Financial Development Research Institute, local governments like the Shanghai State-owned Assets Supervision and Administration Commission, major brokerage consulting firms, and social organizations have begun to pay attention to this topic. From existing viewpoints, many believe that offshore renminbi stablecoins should be piloted in the Hong Kong market, and once conditions are ripe, exploration should be conducted in domestic offshore markets represented by free trade pilot zones. The reason for the slow development of Web3 in Hong Kong has been the obstruction of channels, and if an offshore renminbi stablecoin is feasible, it not only opens up more imaginative space in this field, promotes the industry's own development, but also has far-reaching implications for the existing financial system in the long run.
More importantly, for participants, stablecoins represent a potentially lucrative market and are gradually forming a complete industrial chain. From the issuer's perspective, for retail issuers, stablecoins can significantly reduce transaction settlement costs and enhance competitiveness; for payment issuers, there is ambition to penetrate the digital asset market starting from the medium and move towards global financial infrastructure; even if it is merely to enhance stock prices and gain capital narratives, there is motivation for some participants to get involved. Recently, with the prevalence of concepts, over five groups, including Zhong An Online, Fourth Paradigm, and Jiamu Technology, have announced large-scale financing plans, with OSL Group placing over 101 million shares at a price of HKD 14.9 per share, with a financing plan close to HKD 2.4 billion. Beyond issuance, major virtual asset trading platforms and custodians, primarily banks, are actively laying out plans to capture industry dividends.
Based on the above factors, the speculation around stablecoins will continue in the short term, and the competition for licenses, as a stepping stone in this compliance race, will also enter a heated phase. However, it is worth noting that as an industry in its early stages, the scope of influence of licenses, the strength of their effects, and even the feasibility of business needs are yet to be examined. Considering the hard threshold of HKD 25 million and the potential ongoing compliance costs exceeding one million annually, without strong business model support, hasty applications may lead to losses. As the Hong Kong Monetary Authority's article suggests, those who pursue stability and sustainable development will ultimately be the minority, while more companies merely seeking to ride the wave will inevitably revert to their original forms after the license scrutiny.
In this regard, investors closely watching the stocks may need to be more vigilant.
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
