Hong Kong Stablecoin Stocks Drop 10.5%-20% as New Rules Take Effect

Stablecoin-linked stocks in Hong Kong plunged sharply on Friday as new regulatory measures took effect, marking a significant shift in the market landscape for digital assets. Bright Smart Securities & Commodities Group, Yunfeng Financial Group, Guotai Junan International Holdings, and OSL Group all posted double-digit declines, with losses ranging from 10.5% to nearly 20%. These companies are broadly categorized as “stablecoin-concept firms” due to their exposure to stablecoin-related services such as custody, trading, and issuance [1].

The sell-off occurred alongside broader market declines, with the Hang Seng Index dropping over 1%, the Hang Seng Tech Index down 1.02%, and the Hang Seng SmallCap Index falling 1.54%. The volatility reflects investor anxiety over the newly introduced regulatory regime, which includes mandatory one-to-one full reserves, one-day redemption guarantees, and a minimum capital requirement of 25 million Hong Kong dollars ($3.18 million) [3].

Industry experts, however, have characterized the drop as a healthy correction rather than a sign of systemic distress. Allen Huang, a senior stablecoin policy researcher at the Hong Kong University of Science and Technology, described the market response as a “positive adjustment,” suggesting that the frenzy around stablecoins had extended into equity markets and needed recalibration [1]. Similarly, Xu Han of HashKey Group stated that the sell-off was a rational market reaction to months of speculative enthusiasm, emphasizing that the regulatory measures aim to prioritize stability and credibility [3].

Niko Demchuk of AMLBot and Shukyee Ma of Plume both echoed the sentiment, pointing to the role of high licensing barriers and challenges faced by smaller firms as contributing factors to the market recalibration. They noted that the correction would likely weed out short-term speculation and allow more fundamentally strong players to establish dominance [1][3]. The regulatory environment is expected to favor early license applicants, who will benefit from first-mover advantages and economies of scale, according to Huang [3].

Market observers predict that the six-month transition period will see consolidation among potential stablecoin issuers, with only a limited number of licenses likely to be granted. Smaller or speculative entrants are expected to either pause their efforts or shift to more favorable jurisdictions [2]. Demchuk anticipates that banks acting as custodians will favor partnerships with established license frontrunners, further reshaping the market toward larger players [3].

While the volume of Hong Kong-dollar-backed stablecoins may not rival U.S. dollar-backed counterparts in the short term, analysts believe the strict regulatory environment will position HKD-stablecoins as a viable solution for international trade and cross-border payments. Leverage on Hong Kong’s status as a global financial hub and its strong regulatory framework could give local stablecoins a strategic edge in the DeFi and payments sectors, though significant volume growth is not expected before 2027 [3].

The regulatory shift is part of a global trend in tightening oversight for digital assets, aligning Hong Kong with broader efforts to enhance transparency and mitigate systemic risks. The Hong Kong Monetary Authority (HKMA) has emphasized that the rules are designed to protect consumers and ensure financial stability while supporting innovation [3]. As the market adapts to the new standards, clarity on compliance strategies and financial resilience will become critical in restoring investor confidence.

Source:

[1] PANews, [https://www.panewslab.com/en/articles/eac66c5a02b48fa1a5cdff2906](https://www.panewslab.com/en/articles/eac66c5a02b48fa1a5cdff2906)

[2] advfn.com, [https://mx.advfn.com/bolsa-de-valores/COIN/BTCUSD/crypto-news/96548878/hong-kong-stablecoin-stocks-slide-as-new-rules-tak](https://mx.advfn.com/bolsa-de-valores/COIN/BTCUSD/crypto-news/96548878/hong-kong-stablecoin-stocks-slide-as-new-rules-tak)

[3] hongkongpressbulletin.com, [https://www.hongkongpressbulletin.com/](https://www.hongkongpressbulletin.com/)