The battle for the trillion-dollar stablecoin market in Hong Kong has begun. How can ordinary people seize the opportunity?

From Wall Street to Lujiazui, from Silicon Valley tech giants to Hangzhou e-commerce headquarters, everyone is following the first batch of stablecoin licenses that the Hong Kong Monetary Authority is about to distribute — this "digital financial birth certificate" could give rise to the next trillion-dollar business empire. With the "Stablecoin Regulation" set to officially take effect on August 1, 2025, Hong Kong is accelerating into a new era of digital finance. This not only marks the birth of the world's first comprehensive regulatory framework for fiat stablecoins but also opens the door for compliance institutions to innovate in digital finance.

I. Implementation of the Bill: August 1 Marks the Beginning of a New Era in Digital Finance

On June 6, 2025, the Hong Kong SAR government officially announced that the "Stablecoin Ordinance" will take effect on August 1, marking the birth of the world's first comprehensive regulatory framework for fiat stablecoins. According to the ordinance, any fiat stablecoin or stablecoin pegged to the Hong Kong dollar issued in Hong Kong must apply for a license from the Hong Kong Monetary Authority, and the reserve assets must be 100% fully backed and redeemable in real-time. This system design not only mitigates risks similar to the collapse of TerraUSD but also opens the door for compliance institutions to innovate in digital finance.

II. Capital Frenzy: Circle's Wealth Creation Myth and Market Volatility

On June 5th, USDC issuer Circle went public on Nasdaq, with its stock price soaring from $31 to $298.99, and its market value briefly exceeding $100 billion. However, hidden dangers lurked behind the celebration: just two weeks later, Circle's stock price fell nearly 40%, as early investors such as ARK funds cashed out.

This extreme volatility reflects the dual nature of the stablecoin industry: on one hand, it serves as a bridge connecting traditional finance and digital assets, with a daily trading volume of USDC exceeding 15 billion USD, becoming an important tool for cross-border payments; on the other hand, its value completely relies on reserve assets, and if an event similar to the UST collapse in 2023 occurs, the entire ecosystem will face systemic risks.

What is even more concerning is that the Hong Kong Monetary Authority has clearly stated that the number of licenses issued in the first batch will be controlled to single digits. This means that even if the giants manage to enter the market, they will face fierce competition for existing market share. The case of Circle proves that wealth booms are often accompanied by regulatory uncertainty and dramatic fluctuations in market sentiment. However, Circle's rise is not accidental. 88% of its reserve assets are U.S. Treasury bonds and overnight repurchase agreements, and it undergoes monthly audits by Deloitte, which makes its operations transparent and a preferred choice for institutions. More importantly, Circle is applying for a federal trust bank license, and once approved, it will be directly connected to the Federal Reserve's payment system, fundamentally changing the settlement logic of stablecoins.

3. Competition Among Giants: The License Battle Between E-commerce and Financial Institutions

The intensity of this licensing competition far exceeds expectations. According to disclosures from the Hong Kong Monetary Authority, at least 9 institutions have submitted expressions of interest, including JD Coin Chain Technology and Round Coin Innovation Technology, which participate in the "sandbox project," as well as the joint venture between Standard Chartered Bank and Hong Kong Telecom. Among these institutions, there are not only traditional financial giants but also new players in blockchain, as well as the presence of multinational e-commerce giants.

JD.com's ambitions are particularly evident: its cross-border payment platform "Yi Payment" has begun in-depth communication with the Hong Kong Monetary Authority, planning to embed stablecoins into the global supply chain finance system. Ant International has clearly stated that it will submit materials within 24 hours after the licensing application channel is opened. Even more noteworthy is that the legal teams of Walmart and Amazon have arrived in Hong Kong and are studying how to enter the market through the acquisition of local licensed institutions.

The core of this competition lies in the underlying currency anchoring rights of stablecoins. Although the Hong Kong Monetary Authority has not yet clarified whether it will allow the issuance of RMB stablecoins, Director He Zhengyu has revealed that discussions will be held with relevant agencies if other jurisdictions' currencies are involved. This means that once the policy is loosened, RMB stablecoins could become a key weapon to break the dollar's payment monopoly.

The threshold for applying for a license is extremely stringent: non-bank institutions must have a paid-up capital of HKD 25 million, key management personnel must reside in Hong Kong, and reserve assets must be held in licensed banks and subjected to annual audits. This high Compliance cost will shut out small and medium players, but it also builds a moat for leading institutions.

IV. The Revolution of Cross-Border Payments: From 'Ants Moving' to 'Seconds-Level Arrival'

In the financial district of Central, Hong Kong, the application scenarios of stablecoin are rapidly being implemented. A CEO of a cross-border e-commerce company revealed that their team is testing a payment solution of "Hong Kong Dollar Stablecoin + Smart Contract": after the overseas supplier confirms the shipment, the system automatically releases the stablecoin to complete the settlement, and the entire process takes less than 10 seconds, with fees only 1/20 of traditional wire transfers.

The underlying logic of this transformation lies in the reconstruction of cross-border payments by blockchain technology. The traditional SWIFT system requires going through 7-10 intermediary banks and takes 2-3 days, while stablecoins, through distributed ledger technology, can achieve "peer-to-peer" instant settlement. The Hong Kong Monetary Authority estimates that if stablecoins become fully adopted, they could save over 20 billion USD in transaction fees annually for cross-border trade in Asia.

More imaginatively, stablecoins are breaking the boundaries of traditional finance. Huaxia Fund (Hong Kong) plans to launch a fund product that supports stablecoin subscriptions, allowing investors to directly purchase fund shares through USDC or Hong Kong dollar stablecoins, which will completely change the rules of the game for cross-border wealth management.

V. Regulatory Balance: The Art of Balancing Innovation and Risk

The regulatory wisdom of the Hong Kong Monetary Authority is reflected in its risk-based regulatory framework. The Stablecoin Ordinance requires issuers to strictly separate reserve assets from their own assets and to undergo regular third-party audits. At the same time, only licensed institutions can sell stablecoins to retail investors, effectively preventing a recurrence of incidents similar to FTX.

However, the tightness of regulation remains a focal point of market attention. For example, regarding the exchange rate between stablecoins and fiat, the Monetary Authority only requires "redemption at par under reasonable conditions," which leaves room for issuers to operate. This "principle-based regulation" model avoids excessive intervention while leaving flexibility for technological innovation.

6. Strategic Gaming: The US-China Competition for Digital Financial Discourse Power

The deep logic of the Hong Kong bill is a struggle for the dominance of global financial rules:

The digital extension of the dollar hegemony: The United States promotes the expansion of compliant stablecoins such as USDC through the GENIUS Act, essentially migrating the dollar payment network on-chain, alleviating the liquidity pressure of U.S. Treasury bonds while siphoning global capital. Circle's application for a federal trust license is precisely to become the "sovereign agent of on-chain dollars."

The breakthrough path for the internationalization of the renminbi: Hong Kong constructs an on-chain channel for offshore renminbi through stablecoin legislation. If 1.2 trillion yuan in offshore renminbi is converted into stablecoins, it can enhance capital utilization through smart contracts, forming a "dual-track system" in conjunction with the digital renminbi pilot, ultimately achieving a breakthrough in the pricing power of bulk commodities.

Rules competition of regulatory framework: Hong Kong's startup "Regional + Currency Pegging" dual jurisdiction, regardless of where the issuing entity is located, as long as it is pegged to the Hong Kong dollar or targets Hong Kong users, it will be regulated. This design cuts off the arbitrage space for offshore institutions and provides a model for other jurisdictions.

7. Wealth Windfall: A New Battlefield of Opportunities and Risks

In the face of this transformation, ordinary people are not merely spectators. The following three paths are worth following:

1. Investment Compliance Targets:

The upcoming "Virtual Asset ETF" by the Hong Kong Securities and Futures Commission will allow retail investors to invest in compliant stablecoin funds through their Hong Kong stock accounts.

2. Participation in Scene Construction:

Cross-border e-commerce, logistics companies, etc. can explore embedding stablecoins into business processes to reduce exchange rate fluctuation risks.

3. Technical Capability Reserve:

Skills such as blockchain development and smart contract design will become the core competitiveness in the digital finance era.

Conclusion: Standing at the crossroads of history

The enactment of the Hong Kong stablecoin bill marks the official entry of human society into the era of "programmable currency." As the Hong Kong Dollar stablecoin replaces cash USD in the Southeast Asian market, and as the Renminbi stablecoin becomes the settlement currency for cross-border e-commerce, what we are witnessing is not only an innovation in financial instruments but also a reconstruction of the international monetary system. This transformation is bound to be filled with controversy and risks, but as the President of the Hong Kong Monetary Authority, Eddie Yue, stated: "A robust regulatory framework is the cornerstone of sustainable development in digital finance." For the average person, rationally mastering compliance channels and following the technological implementation scenarios may provide good opportunities in this transformation—the true wealth windfall often belongs to those who understand trends and grasp rules.