The wind is blowing! Stablecoin regulatory policies are about to be implemented, and Hong Kong's Crypto Assets concept stocks are joining in the pump.

Hong Kong's crypto assets-related stocks experienced a general pump today (8th), and the market generally believes this is related to the optimistic attitude towards the upcoming stablecoin licensing system in Hong Kong. With the Stablecoin Regulation set to officially take effect on August 1, Hong Kong has taken a critical step in the regulation of virtual assets. This not only provides a clear compliance pathway for stablecoin issuance organizations but also injects new vitality into the Hong Kong crypto market.

1. Hong Kong crypto concept stocks surged, market confidence strengthened

According to data from Yahoo Finance, Hong Kong crypto-related stocks performed well today:

The stock price of Chinese brokerage firm Guotai Junan International surged by 28.54% today, closing at 6.08 points. The company officially received approval from the Hong Kong Securities and Futures Commission last month to upgrade its securities trading license, allowing it to conduct virtual asset trading services and provide related investment advice.

The stock price of the Hong Kong Compliance Crypto Assets exchange OSL rose by 8.14%, closing at 17 points.

Digital retailer Dmall Inc., which is preparing to apply for a stablecoin license in Hong Kong, has pumped 10.297%, closing at 12.64 points.

Hong Kong's Victory Securities, which was approved to offer Crypto Assets trading services in April this year, has risen by 33.858%.

Investors are clearly showing high enthusiasm due to the positive news that Hong Kong will implement a stablecoin licensing system on August 1. According to the upcoming regulations, all institutions issuing stablecoins must apply for and obtain a license from the Hong Kong Monetary Authority (HKMA).

2. Expectations for Stablecoin Regulatory Rules and License Issuance

The Secretary for Financial Services and the Treasury of Hong Kong, Christopher Hui, stated in an interview with Ming Pao that the authorities hope to issue the first batch of stablecoin licenses within this year, but the number of licenses is expected to "remain in single digits." He pointed out that the Hong Kong Monetary Authority is currently consulting the market on the implementation of the "Stablecoin Regulation" guidelines, which are expected to be announced in July, with specific content involving anti-money laundering and other related requirements. He indicated that he hopes to receive license applications after the "Stablecoin Regulation" is implemented, and the Hong Kong authorities' goal is to issue licenses within this year.

It is reported that there are at least 9 institutions that are interested in or are considering applying for a stablecoin license, including 3 groups of institutions participating in the Hong Kong Monetary Authority's stablecoin issuer "sandbox" (Standard Chartered Bank, Animoca Brands, Hong Kong Telecommunications, JD Coin Chain Technology (Hong Kong) and Round Coin Innovation Technology), and all 3 groups plan to issue Hong Kong dollar stablecoins. The applying institutions are mostly the largest financial institutions and internet companies in China, while some small enterprises interested in applying face bleak prospects, with intense competition.

3. Offshore Renminbi Stablecoin: Hong Kong's Potential "Ace"

Although the upcoming "Stablecoin Regulations" and the "sandbox" for stablecoin issuers are initially designed for the "Hong Kong Dollar Stablecoin", the "offshore Renminbi pegged stablecoin" has recently become a hot topic locally. Yao Zhisheng, a member of the Standing Committee of the National Committee of the Chinese People's Political Consultative Conference, stated that the biggest opportunity for Hong Kong to develop stablecoins lies in promoting offshore Renminbi stablecoins rather than Hong Kong Dollar stablecoins. He suggested that the Hong Kong Special Administrative Region government seek support from the central government to develop an officially certified Renminbi stablecoin to enhance market confidence and assist Hong Kong in becoming a global hub for stablecoin issuance.

Last week, Reuters quoted informed sources reporting that China's e-commerce giant JD and Alibaba's fintech giant Ant Group are reportedly actively lobbying the People's Bank of China (PBOC) for authorization to issue an "offshore renminbi" stablecoin in Hong Kong.

In this regard, Xu Zhengyu also mentioned: "If it involves the currency of a judicial jurisdiction, we must discuss it with the relevant institutions." He pointed out that although current legislation does not specify "whether it is permissible to issue stablecoins pegged to specific currencies," as long as it is permitted by the legal tender laws, if it involves currencies from other judicial jurisdictions, the impact on local exchange rates and various risks must be considered as a whole.

4. Stablecoins Reshape Global Payment Infrastructure

The market's attention to stablecoins has also been driven by the remarks made by the Governor of the People's Bank of China, Pan Gongsheng, in June, where he stated that stablecoins and Central Bank Digital Currencies (CBDCs) are reshaping the global payment infrastructure. Xu Zhengyu also pointed out that he hopes stablecoins can "focus on addressing the challenges and pain points in the real economy, such as cross-border payments, especially those involving high risks of 'local currency', or when the local financial system is not so complete, there are certain challenges in conducting cross-border payments." He further added, "However, if there are stablecoins based on fiat currency, as an effective payment tool, they can facilitate cross-border transactions and reduce the transaction costs involved."

Conclusion:

Hong Kong's stablecoin regulatory policy has been implemented, bringing a clear compliance framework and new development opportunities to the crypto market. The widespread increase in crypto concept stocks reflects the market's confidence in Hong Kong becoming a hub for virtual assets. In particular, the potential of offshore RMB stablecoins may become Hong Kong's "trump card" in the stablecoin sector. However, how to balance innovation with regulation, as well as manage the complexities involving currencies from other jurisdictions, will be important issues for Hong Kong on its path to becoming a global stablecoin issuance hub.