Hong Kong Stablecoin Stocks See Possible Correction Amid Regulatory Transition and Market Adjustments

Key Points

1. Hong Kong stablecoin stocks dropped by over 10% following the introduction of new regulatory measures, with some companies like Bright Smart Securities & Commodities Group falling nearly 20%.

2. Experts, such as Allen Huang and Xu Han, interpret the decline as a correction after speculative excess, with regulatory rigor aimed at ensuring systemic stability and credibility.

3. The new regulations require stablecoin issuers to maintain a one-to-one full reserve, allow one-day redemptions, and have a minimum capital of 25 million Hong Kong dollars ($3.18 million).

4. Early license holders may benefit from first-mover advantages, while smaller companies could face challenges or opt out of the market.

5. Hong Kong's stablecoin market is not expected to match the US in volume, but it may gain a strategic edge in cross-border payments and DeFi, with significant growth anticipated only after 2027.