July 25, 2025
By Our Correspondent
Hong Kong’s de facto central bank attempted to control the excitement surrounding stablecoins for the second time in a month by cautioning against money-laundering risks, stock speculation, and concepts and operations that are too nebulous.
In a blog post on Wednesday, Eddie Yue Wai-man, the chief executive of the Hong Kong Monetary Authority (HKMA), stated that some reinforcement was needed for the efforts made over the previous month to quell market and societal debates concerning stablecoins. “We must avoid excessive speculation in the market and public opinion,” he stated.
The stablecoin ordinance in Hong Kong, which was passed in late May and will go into effect on August 1, mandates that issuers get a license from the HKMA and adhere to stringent reserve asset and other requirements.
According to Yue, “dozens of institutions” contacted the HKMA in order to inquire about opportunities or submit applications for licenses.
The HKMA will lay out plans for receiving and handling license applications the following week. Additionally, it plans to release the findings of two consultations at roughly the same time: one on anti-money-laundering and counterterrorism financing standards for regulated stablecoin activities, and the other on rules for overseeing licensed stablecoin issuers.
Yue stated, without giving names, that certain institutions that were thinking about stablecoins either lacked the knowledge and skills necessary for risk management or failed to offer workable, targeted solutions and implementation strategies.
According to him, “many of them are still in the conceptual stage, such as proposing to support the development of Web 3.0 [or] improve the efficiency of the foreign-exchange market, or to improve the efficiency of cross-border payments, but lack practical application scenarios.”
“Regardless of whether their main business is related to stablecoins or digital assets,” he added, “some listed companies’ stock prices and trading volumes surged simply because they claimed an intention to develop stablecoin operations.” This suggests that a “bubble” may be forming, which merits more attention.
According to Yue, only a small number of stablecoin licenses would be accepted in the first stage.
According to him, investment in stablecoins could have an impact on a company’s profitability even if it has a license. In addition to warning Hongkongers about scams, he stated, “We hope that investors will remain calm and think independently when digesting the ‘good’ news in the market.”
