Hong Kong's new rich and old money rush to stablecoins

Author: Xie Zhaoqing, Source: Tencent News "Qianwang"

He Hongzhe, head of the Digital Finance Department of the Hong Kong Monetary Authority, who is responsible for the approval of Hong Kong stablecoin licenses and related businesses, is one of the hottest names in Hong Kong Island recently. The "Stablecoin Ordinance" announced by the Hong Kong government will be implemented on August 1. Stablecoins will be included in the licensing management. "Old money" and new riches are queuing up to visit the Digital Finance Department of the Hong Kong Monetary Authority in order to seize the initiative in the application for licenses next month.

"This time, the outside world's enthusiasm for Hong Kong's stablecoins is much higher than in the past few years." An industry insider who is very familiar with the Hong Kong currency circle and frequently deals with the Hong Kong Monetary Authority revealed. This can also be seen from the enthusiasm of Chinese-funded institutions in Hong Kong to knock on the door of the Hong Kong Monetary Authority.

Stablecoins, which were born in the "currency circle" and aim to maintain relatively stable value by linking to a relatively stable asset (such as legal tender, commodities or a basket of assets), have quickly entered the mainstream vision this year due to the strong pursuit of the Trump administration. At present, the main types of stablecoins on the market include legal currency-collateralized stablecoins, cryptocurrency-collateralized stablecoins, and algorithmic stablecoins.

Different from previous narratives, stablecoins based on blockchain technology are relatively more convenient, efficient and low-cost in terms of payment and transactions, making their future prospects promising, especially in cross-border payments. At the same time, this is also seen as one of the biggest development opportunities for Hong Kong in the future.

However, the "Stablecoin Ordinance" announced by the Hong Kong government is actually a legal framework, and some real application details and possible guidelines have not yet been mentioned. Many individuals or institutions who want to actively participate in the stablecoin market expect to learn more.

The stablecoin announced by the Hong Kong government this time is pegged to the fiat currency, that is, it is a stablecoin that is collateralized with the fiat currency at a 1:1 ratio at face value, but the Hong Kong government has not restricted the types of fiat currencies that are pegged. Stablecoins provide a relatively stable form of cryptocurrency by being pegged to the fiat currency, thereby reducing the volatility of traditional cryptocurrencies.

1. More than 20 Chinese institutions have met with the Hong Kong Monetary Authority

Tencent News "Qianwang" learned that in the past period of time, more than 20 Chinese institutions in the market have met with the Hong Kong Monetary Authority's financial technology department responsible for stablecoins. These institutions include but are not limited to Chinese financial institutions in Hong Kong, state-owned enterprises and industrial institutions, etc. He Hongzhe and his team are relatively busier than before.

In addition to these active Chinese-funded institutions, some "old money" who have disappeared from the spotlight of the wealthy circle and the financial market for a while are also actively "organizing" teams in Central, hoping to participate in Hong Kong's stablecoin business. Among them are Dai Yongge, the actual controller of Renhe Commercial Group, Lin Yong, the former CEO of Haitong International, who was once known as the "No. 1 in Central", and Zhai Jun, the founder of Yunlong Capital.

In addition, including Lenovo's Hony Capital, they are also actively preparing stablecoin business teams in Hong Kong. Hony Capital also applied to join the Hong Kong government's stablecoin "sandbox" in 2024. However, as of press time, this news has not been commented on by Hony Capital.

Prior to this, in July 2024, the Hong Kong government announced three institutions that entered the sandbox, including JD Coin Chain Technology (Hong Kong) Co., Ltd., Yuancoin Innovation Technology Co., Ltd., and Li Zekai's Hong Kong Telecom. Ant Group's Ant International and Ant Digits are both actively communicating with regulators in the hope of applying for a stablecoin license. Ant International and Ant Digits are both entrepreneurial businesses of Ant Group. In its 2024 structural reorganization, Ant Group has newly established an innovative business segment, which mainly includes three companies: Ant International, Ant Digits, and OceanBase. Among them, Ant Group Chairman and CEO Jing Xiandong serves as the chairman of Ant International, and the chairman of Ant Digits is Han Xinyi. Ant International and Ant Digits operate independently. Prior to this, Ant Group stated that it "supports the innovative business segment to accelerate its entry into the market." Tencent News "Qianwang" learned that the teams of Ant International and Ant Digits have been carrying out "currency circle"-related businesses in Hong Kong for some time. Ant Digits has been promoting the currency circle's RWA (Real World Assets, real asset tokenization) business in Hong Kong, which has the opportunity to become one of its application scenarios for applying for a stablecoin license in Hong Kong.

RWA refers to the business of tokenizing real-world assets, especially those that can generate stable income, such as hotel leasing, photovoltaic power generation, and even stocks, bonds, commodities, etc., through blockchain technology so that they can be traded, managed and circulated on the chain.

In simple terms, RWA is to tokenize real-world assets and use blockchain technology to trade and manage them. This business is actually to assist traditional assets in financing - in the past few years, many teams in Hong Kong, including Ant Digital, have been doing this kind of business.

Compared to simpler and clearer application scenarios such as cross-border payments, some industry insiders are not optimistic about the direction of combining RWA with stablecoins. However, in addition to Ant Digital, the JD Coin Chain team is also actively exploring this business direction, and it has also "poached" many people from the Ant Digital RWA team.

At the same time, JD Coin Chain has publicly announced that it will apply for a stablecoin license in Hong Kong. However, in addition to the RWA direction based on JD International Logistics, JD's plan also involves cross-border payment scenarios in Hong Kong, Macau and Taiwan of JD Mall, but its scale is much smaller than cross-border payments such as Wanlihui of Ant International.

Wanlihui is a British company acquired by Ant Group in 2019. It is a foreign exchange company that focuses on providing international payment services to enterprises and individual sellers. Its main business is international remittances, foreign exchange options trading, international e-commerce platform collection and settlement, etc.

Public data shows that since the acquisition by Ant Group, based on Alibaba's e-commerce business, the company's business has grown rapidly. By the end of 2024, Wanlihui's global cumulative transaction amount has exceeded US$300 billion, and the number of merchants served has exceeded 1 million.

Tencent News "Qianwang" learned that Ant International may use Wanlihui, a subsidiary of Ant Group, as a scenario to apply for a stablecoin license in Hong Kong. This is also the payment application scenario that the Hong Kong Monetary Authority pays the most attention to.

Given the advantages of cross-border payments achieved by stablecoins under blockchain technology, including low cost and high efficiency, it has great potential in cross-border payments-therefore, the above-mentioned "old money" and upstarts are actively looking for "cross-border payment scenario companies" to cooperate.

Tencent News "Qianwang" learned that in the past period of time, many companies involved in cross-border payments are actively contacting some local consortiums in Hong Kong to jointly apply for stablecoin licenses.

According to incomplete statistics, to date, dozens of teams in the Hong Kong market have begun to form teams to apply for stablecoin licenses.

2. Running the trillion-level stablecoin market

This time, whether the Hong Kong government's "currency circle" industry can take off, there is still a long time to observe. Some relatively pessimistic people in the currency circle are worried whether this time there will be a phenomenon of "loud thunder and little rain".

This is because the Hong Kong government has actively intervened in the "digital currency" industry for more than three years, and has not seen large-scale development of the industry so far. Most digital currency businesses in Hong Kong are temporarily unable to achieve a balance between income and expenditure.

As early as 2022, under the various fluctuations of geopolitics, epidemic impact, etc., the Hong Kong government actively expanded its thinking and decided to participate in the Web3.0 industry from the perspective of a compliant market. Subsequently, the Hong Kong government issued the "Policy Declaration on the Development of Virtual Assets in Hong Kong" (abbreviated as "Declaration 1.0"). For a time, Hong Kong became the center of the global currency circle. Vitalik, the founder of Ethereum, also appeared in Hong Kong to support the relevant forum activities held in Hong Kong, and it was difficult to get a ticket.

Subsequently, the Hong Kong government launched the application for compliant virtual asset fund licenses, compliant virtual asset exchange applications, and the listing of spot Bitcoin ETFs on the Hong Kong Stock Exchange around the development of the "digital currency" industry.

However, the scale of these licensed businesses and ETF products is still climbing. Three years later, there are many institutions that have obtained virtual asset fund management licenses, but there are not many institutions that have actually issued virtual asset-related products; and the Hong Kong Securities and Futures Commission has issued a total of 11 licenses for virtual asset exchanges in the past three years - however, the main business of these exchanges is still in a loss-making state, and even the main business revenue of the exchanges under the head institution Hashkey Group is not optimistic.

"It is very difficult for products in the cryptocurrency circle to follow the compliance route, whether it is a fund or an exchange." Some industry insiders lamented that some exchanges, including the leading exchange OKX, finally gave up applying for licenses in Hong Kong after communicating with Hong Kong regulators many times.

"But this time, it is completely different. This is epoch-making. The launch of the Hong Kong Digital Asset Development Policy Declaration 2.0 (abbreviated as "Declaration 2.0") and the Stablecoin Ordinance means that the cryptocurrency circle and traditional finance and industry are truly connected," a business manager working at the Hashkey Exchange told Tencent News "Qianwang". Xiao Feng, chairman of Hashkey Group, also said on many occasions that the implementation of the Declaration 2.0 and the Stablecoin Ordinance means that Hong Kong not only needs to develop Web3.0, but also needs to truly link Web3.0 with traditional finance.

On June 20, the Hong Kong government issued the "Manifesto 2.0" which established the "LEAP" framework. LEAP is the abbreviation of the following phrases: Legal and regulatory streamlining, Expanding the suite of tokenised products, Advancing use cases and cross-sectoral collaboration, People and partnership development.

Under such a framework, the Hong Kong government promotes the compliance, scale and globalization of digital assets, including: optimizing laws and regulations, clarifying the stablecoin licensing mechanism, promoting the tokenization of real world assets (RWA), and providing tax incentives for tokenized ETFs and digital asset funds.

Before this, whether it was the launch of virtual asset exchanges, virtual asset fund management, and spot ETF products, they were all limited to on-chain assets based on Bitcoin, Ethereum, etc., and were not linked to traditional systems.

Now, Hong Kong has turned from a "test field" in the currency circle to real industrial development in the "Declaration 2.0" and "Stablecoin Ordinance".

Several people who have participated in the application for the license of the Hong Kong Stock Exchange and the issuance of tokenized products told Tencent News "Qianwang" that the Hong Kong government's determination this time is very firm. The most important changes are reflected in three aspects, namely, the inclusion of stablecoins in supervision, the tokenization of RWA (real world assets) is regarded as a key industry, and tokenized ETFs and digital asset funds enjoy tax exemptions.

Now for the first time, tokenized products such as stablecoins and RWA can truly connect the real economy: the currency circle and traditional industries can "flow back" to each other.

"The prospects for stablecoins are very promising. This may be an opportunity to reshape the global currency market in the future, and the stablecoin market is developing rapidly." An industry insider who has been paying attention to the stablecoin market for a long time told Tencent News "Qianwang". He and his team are also actively preparing for the application for a Hong Kong stablecoin license.

Before that, on May 19, 2025, the U.S. Senate passed the GENIUS Act, officially incorporating the U.S. dollar stablecoin into the "digital dollar" system - this is one of the reasons why the market is boiling over this. At present, most products in the stablecoin market are linked to the U.S. dollar.

According to the data of OKG Research, a currency circle data analysis platform, the scale of the global stablecoin market is growing rapidly and is expected to continue to expand in the next few years. In the first quarter of 2025, the scale of on-chain clearing stablecoins exceeded 3.7 trillion U.S. dollars, and the annualized trading volume is expected to exceed 9.8 trillion U.S. dollars. At the same time, the market value of stablecoins has approached 250 billion U.S. dollars, an increase of more than 22 times in five years.

OKG Research data shows that as global stablecoin legislation accelerates, the global stablecoin market supply is expected to reach 3 trillion U.S. dollars in 2030, and the annual trading volume will exceed 100 trillion U.S. dollars. In an optimistic scenario, OKG Research predicts that the global stablecoin market supply will reach 3 trillion US dollars in 2030, and the annual transaction volume will exceed 100 trillion US dollars.

Among them, in terms of the stablecoin payment application scenarios that the Hong Kong government is more concerned about, OKG Research data shows that the annual settlement volume of stablecoin payments will reach 50.8 billion US dollars in 2024, accounting for 7.3% of the global personal cross-border remittance market, and maintaining an annual growth rate of more than 60% for two consecutive years.

Many industry insiders revealed that the Hong Kong government will not issue more than 10 stablecoin licenses in the end, and "many people will eventually become runners-up." Based on the experience of previous virtual asset exchanges applying for stablecoin licenses in Hong Kong, the annual expenditure for the design and implementation of the regulatory framework plan for stablecoin licenses is at least 200 million Hong Kong dollars. Even after obtaining the license, it may take at least 1 to 2 years to achieve a balance of income and expenditure in the current year.

This means that if a team that wants to participate in the application for a stablecoin license in Hong Kong obtains a license in the first batch, the initial investment will be at least 200 million to 400 million Hong Kong dollars.

Although dozens of teams are now pouring in to apply for stablecoin licenses, it is not easy to obtain a stablecoin license in Hong Kong. Based on past experience, according to the Hong Kong government's approval rhythm, the first list of institutions that have obtained stablecoin licenses may appear as early as the end of December 2025.

The time left for the new rich and the "old money" to get ahead is less than half a year.