Hong Kong Stablecoin Ordinance Takes Effect, Why Do Concept Stocks Fall Collectively?

Written by Caijing reporter Tang Jun Kang Kai

On the first day that the Hong Kong Stablecoin Ordinance came into effect, the capital market, which had been bustling for nearly two months, cooled down.

Wind data shows that on August 1st, stablecoin stocks in both the A-share and Hong Kong stock markets collectively fell. Among them, Hong Kong-listed Bright Smart Securities & Finance (1428.HK) fell nearly 20%, Yunfeng Financial (0376.HK) dropped over 15%, OKEx (1499.HK), Lianlian Digital (2598.HK), Guotai Junan International (1788.HK), and OSL Group (0863.HK) dropped over 10%, while A-listed Sifang Precision dropped over 5%.

Unlike when the Stablecoin Bill was passed by the Hong Kong Legislative Council on May 21, the official website of the Hong Kong Monetary Authority (hereinafter referred to as the "HKMA") did not release any information related to stablecoins on August 1.

On July 29, the Hong Kong Monetary Authority’s official website released a document on the licensing system for stablecoin issuers.

At a technical briefing held on the same day, the Hong Kong Monetary Authority stated that it expects the first batch of Hong Kong stablecoin issuer licenses to be issued in early 2026. At the same time, the Hong Kong Monetary Authority emphasized its concerns about money laundering risks and made it clear that the identities of Hong Kong's compliant stablecoin holders must be verified in the initial stage, which means a real-name system to some extent.

In addition, Hong Kong Monetary Authority officials have repeatedly emphasized recently that only a single-digit number of licenses are expected to be issued in the first batch.

"The regulatory standards are stricter than the market expected, the licensing time is later than the market expected, and the number of licenses issued is less than the market expected. The share prices of stablecoin concept stocks will naturally fall back." Zou Chuanwei, director of the Jiangsu Jinke Digital and Technology Finance Research Institute, told "Caixin".

"Overall, the market has reflected expectations for the implementation of Hong Kong's stablecoin policy." Zheng Lei, chief economist of Samoyed Cloud Technology Group, told Caixin that the Hong Kong Monetary Authority's attitude shows that it will regard safety and stability as more important considerations in the early stages of licensing, which may mean that some popular institutions expected by the market will miss the first batch of licenses.

Slower-than-expected licensing

Stablecoins are a special type of cryptocurrency that leverages blockchain technology advantages, such as decentralization, peer-to-peer transactions, low costs, and high efficiency. Unlike cryptocurrencies like Bitcoin, stablecoins are typically pegged to a reference asset, such as a fiat currency, to maintain relative stability and serve as a medium for cryptoasset transactions.

In recent years, with its characteristics of stable value, high efficiency and low cost, stablecoins have gradually penetrated into traditional financial fields such as cross-border payments, and its application prospects have also attracted great attention from major global economies such as the United States, the European Union, and Hong Kong, China.

On August 1, 2025, the Stablecoin Ordinance officially came into effect, marking the official establishment of a stablecoin issuer licensing system in Hong Kong and the legal status of compliant stablecoins in Hong Kong.

Prior to this, everyone was eagerly anticipating the progress of licensing stablecoin issuers in Hong Kong. On June 15th, Hong Kong Financial Secretary Paul Chan Mo-po stated that after the regulations come into effect, the Hong Kong Monetary Authority will expedite the processing of license applications received, allowing qualified applicants to commence their operations. On July 7th, Paul Hui, Secretary for Financial Services and the Treasury, stated in a newspaper interview that the goal was to issue licenses within the year.

On July 29th, the Hong Kong Monetary Authority (HKMA) released a document outlining its licensing regime for stablecoin issuers. The press release stated that prospective applicants are encouraged to contact the regulator on or before August 31st to understand regulatory expectations and receive appropriate feedback. Licensing will be an ongoing process, and institutions that are fully prepared and wish to be considered as soon as possible should submit their applications on or before September 30th.

Zheshang Securities later issued a statement saying, "This can be understood as communication of intent in August, and the first batch of license applicants will begin to be accepted in September."

Hong Kong Monetary Authority Deputy Chief Executive Chan Wai-min stated that license applications require a significant amount of documentation, creating a significant workload, and regulators must devote equal effort to reviewing all the materials. The first stablecoin licenses are expected to be issued in early 2026.

"The overall pace of progress is slightly slower than we expected, reflecting the prudent and stable regulatory attitude of the (Hong Kong) Monetary Authority. We expect that the first batch of stablecoin issuer licenses will be issued early next year," CITIC Securities said in a statement.

In this regard, Yu Weiwen mentioned in an article published on July 23rd: "Stricter regulatory requirements will inevitably limit the possibility of significant expansion of the stablecoin business in the short term, and there will be some reaction from the industry, which is expected. After all, the regulated stablecoin business is in its early stages. Starting with strict regulations, stabilizing them, and then relaxing them appropriately based on practical experience is clearly more conducive to the continued healthy development of the market and issuers than starting with too loose regulations and then cleaning up the mess."

At the aforementioned technical briefing, the Hong Kong Monetary Authority particularly emphasized the regulatory requirements for anti-money laundering.

Hong Kong Monetary Authority Assistant Director (Regulation and Anti-Money Laundering) Chan King-hong said that the requirement to verify the identity of every compliant stablecoin holder in Hong Kong is stricter than that in the previous regulator's consultation document on anti-money laundering supervisory guidelines.

Currently, the Hong Kong Monetary Authority has listed anti-money laundering regulatory requirements in the "Guidelines on Combating Money Laundering and Counter-Terrorist Financing (Applicable to Licensed Stablecoin Issuers)", including risk assessment, customer due diligence, continuous monitoring, stablecoin transfers and suspicious transaction reporting.

It is worth noting that in June this year, the Bank for International Settlements (BIS), known as the "central bank of central banks", released a special chapter of its annual economic report in advance and issued a strong warning against stablecoins.

The BIS believes that stablecoins still fail to meet the requirements to become a pillar of the monetary system across three key tests: single-denominator, resilience, and integrity. In particular, there are significant deficiencies in integrity, primarily manifested by the fact that "stablecoins have become a preferred method for illicit exploitation to circumvent integrity safeguards," which primarily points to the challenges they pose to anti-money laundering.

Concept stocks pullback

Since the "Stablecoin Bill" was passed by the Hong Kong Legislative Council on May 21, the concept of stablecoins has continued to heat up in the capital market.

"Some listed companies, regardless of whether their core business is related to stablecoins or digital assets, are able to 'turn stones into gold' by announcing their intention to develop stablecoin business. Their stock prices will rise, stock trading volume will increase significantly, and the company's visibility will also be greatly improved." In an article on July 23, Yu Weiwen said that with the hot speculation of the stablecoin concept, the market has become overly excited.

On July 3rd, Hong Kong-listed Duodian Digital Intelligence (2586.HK) announced it was preparing to apply for a Hong Kong stablecoin license. Its stock price surged over 20% that day, reaching nearly 90% intraday at one point. Public information indicates that Duodian Digital Intelligence was founded by Zhang Wenzhong, founder of Wumart Supermarket, and its primary business is providing digital solutions to retailers and supermarkets.

A-share investors are also enthusiastic about stablecoins. On the morning of July 29th, rumors circulated that Hang Seng Electronics and Ant Financial were collaborating on a stablecoin, sending Hang Seng Electronics (600570.SH)'s stock price hitting its daily limit. According to media reports, Hang Seng Electronics responded the same day, stating that it was aware of the rumors and that the company's stock price limit might be related to them, but that the official announcement regarding the collaboration would be required. The following day, an analyst at Huafu Securities claimed to have forwarded the information, but it was later confirmed to be false.

Trading in virtual assets related to stablecoins has also been a hot topic. On June 25, Guotai Junan International announced that it had been approved to upgrade its securities trading license, allowing it to provide a full range of virtual asset trading services. The company's stock price soared nearly 200% that day. As of August 1, Guotai Junan International's share price was HK$5.71 per share, a nearly 380% increase from before the license upgrade.

Wind data shows that since May 21, the A-share stablecoin index has risen by more than 25%; some stablecoin concept stocks in Hong Kong stocks have seen huge increases, among which OKEx has risen by more than 185%, Yaoche Securities Finance has risen by 86%, and Yunfeng Financial has risen by 55.9%.

In response to the enthusiasm of the capital market, Yu Weiwen published two articles to "cool down" the stablecoin.

On June 23rd, Yu Weiwen published an article titled "The Stability and Sustainable Development of Stablecoins," stating, "As the implementer of the stablecoin regulatory system, we are certainly happy to see the public's interest in stablecoins. However, as a regulator, I also want to cool down the atmosphere so that everyone can view stablecoins more objectively and calmly."

A month later, Yu Weiwen wrote again, "The cooling efforts still need to be strengthened." He bluntly stated that the current discussion surrounding stablecoins is overly conceptual and has a bubble trend.

"We have made it clear earlier that in the initial stage, at best, only a few stablecoin licenses will be approved. In other words, there will be many disappointed people." Yu Weiwen further stated that even if a license is obtained, there will be a certain degree of uncertainty in its contribution to the company's short-term profits. He hopes that investors will remain calm and think independently when digesting the "good" market news.

After the market closed on July 29, the Hong Kong Monetary Authority announced that it does not expect to issue any licenses this year.

"This is very different from the market's early prediction that stablecoins will be rapidly promoted starting from August." Zheng Lei said that at least until the beginning of next year, the capital market's hype about stablecoins will cool down.

Since July 30th, stablecoin stocks have collectively retreated. Wind data shows that stocks like Yaocai Securities Finance, Lianlian Digital, and Yunfeng Financial have seen cumulative declines of over 20% over the past three trading days.

Who seizes the initiative?

Although the pace of licensing is slower than expected, with the official implementation of the Stablecoin Ordinance, the market is still paying close attention to the licensing list of Hong Kong stablecoin issuers.

CITIC Securities released a research report saying that it recommends continuing to focus on two main lines: issuers that may obtain the first batch of scarce licenses, and scenario platforms that deterministically participate in the creation of stablecoin usage scenarios.

If the pace of dealing cards changes, who will be the first to get the cards?

In a previously published article, Yu Weiwen mentioned the licensing requirements for some stablecoin issuers, including that licensed stablecoin issuers must have real application scenarios, sufficient supporting, key capabilities and experience in different fields, and capabilities in technological security, risk management and anti-money laundering, etc. License applicants must prove that they have specific and feasible business plans and have sufficient technical and financial resources to support operations.

“The Hong Kong Monetary Authority has announced its requirements for licensed institutions,” Zou Chuanwei said. “First, there must be a use case for stablecoins; second, there must be blockchain technology reserves that can meet regulatory compliance requirements, including anti-money laundering requirements.”

In terms of application scenarios, Zou Chuanwei believes that currently, more than 90% of the USD stablecoin's trading volume comes from crypto asset transactions. Hong Kong may place greater emphasis on the application of the HKD stablecoin in real economy scenarios such as cross-border trade settlement.

According to Eddie Yue, as of July 23rd, dozens of institutions had proactively contacted the Hong Kong Monetary Authority (HKMA), some of which had explicitly expressed interest in applying for stablecoin licenses. Public information shows that institutions currently interested in applying for stablecoin licenses in Hong Kong include payment institutions, internet companies, and commercial banks.

Among the institutions interested in applying for stablecoin licenses, JD.com, Standard Chartered Bank, Yuanbi Technology, which are in the Hong Kong Monetary Authority's stablecoin issuer sandbox, and Bank of China (Hong Kong) and Ant Group, which are not in the sandbox, are all the first batch of favorites to obtain licenses that are hotly discussed in the market.

On June 12th, Ant Group's Ant International and Ant Digits announced their intention to apply for stablecoin issuer licenses in Hong Kong. Industry insiders analyzed that Ant Group's simultaneous application for two licenses is expected to increase its chances of obtaining them.

A professional who has been paying close attention to stablecoins analyzed to Caixin that Ant Group has scenarios such as cross-border payments and RWA, and has a good foundation in blockchain technology and anti-money laundering, and is very likely to be the first to obtain a license.

On June 17, JD.com Chairman Liu Qiangdong expressed his hope to apply for stablecoin licenses in all major currency countries and regions around the world.

As of June 19, JD.com's stablecoin has entered the second phase of sandbox testing. The testing scenarios mainly include cross-border payments, investment transactions, retail payments, etc. In the future, it will provide mobile and PC application products for retailers and institutions.

According to media reports, Yuanbi Technology CEO Liu Yu recently expressed in an exclusive interview that he intends to issue the Hong Kong dollar stablecoin HKDR on the Ethereum public chain.

Many industry insiders told Caixin that JD.com and Yuanbi Technology had previously entered the stablecoin issuer sandbox and were more familiar with the relevant mechanisms and processes, so they also had a greater chance of being among the first to obtain licenses.

On July 31, Standard Chartered Bank's CEO for Hong Kong and Greater China and North Asia, Angelica Huen, said that the company is studying the latest stablecoin regulatory documents issued by the Hong Kong Monetary Authority, and aims to submit an application as soon as possible after the Stablecoin Ordinance comes into effect.

Among the aforementioned institutions seeking a stablecoin license, Bank of China (Hong Kong) has yet to disclose any relevant information. Several industry insiders told Caixin that Bank of China (Hong Kong) will also apply for a stablecoin license in Hong Kong.

Caijing asked Bank of China (Hong Kong) whether it has applied for a stablecoin issuer license and its subsequent plans for stablecoins. Bank of China (Hong Kong) responded, "There is nothing to respond to at this time."

Bank of China (Hong Kong) and Standard Chartered Bank are both note-issuing banks in Hong Kong. The latter has even entered the Hong Kong Stablecoin Issuer Sandbox. Both are considered likely to be among the first to obtain licenses.

However, as the Hong Kong Monetary Authority (HKMA) shifts its licensing rhythm, market expectations are also shifting. Zheng Lei believes that the HKMA's approach indicates that it prioritizes safety and stability in the initial stages of licensing, which may mean that some anticipated institutions will miss out on the first wave of licenses.