Hong Kong Stablecoin: First Batch of Players Exit

Hong Kong’s stablecoin and RWA markets are experiencing their first wave of exits.

On September 29 (UTC), Foresight News reported that at least four Chinese-backed financial institutions and their subsidiaries—including Guotai Junan International—have recently exited the Hong Kong stablecoin license process or paused their RWA initiatives in Hong Kong, citing increased regulatory caution.

Morgan, an executive close to Hong Kong’s financial sector, told Foresight News that some Chinese banks, after receiving regulatory guidance, have adopted a more cautious stance toward stablecoins, with several choosing to delay their entry. According to industry insiders, the Hong Kong Monetary Authority set two key deadlines: expressions of interest for the stablecoin license were due by August 31 (UTC), and formal applications by September 30 (UTC). Institutions that do not submit by tomorrow will miss the first round of stablecoin licenses.

In the RWA (Real World Assets) space, some Chinese institutions have also paused their operations following regulatory direction. Lee, a professional close to Chinese brokerages, told Foresight News that Guotai Junan International and several others have halted their RWA-related business in Hong Kong, with Guotai Junan’s RWA activities fully suspended. Lee also shared that regulators notified another A-share-listed Chinese brokerage to stop its RWA efforts in Hong Kong.

Within the sector, some believe stablecoins are a subset of RWA, as U.S. dollar stablecoins essentially tokenize a real-world asset—the dollar itself.

RWA (Real World Assets) refers to tokenizing tangible assets. Common examples include tokenized U.S. equities, Treasuries, and gold. This emerging sector has gained particular momentum in the United States. For example, major online broker Robinhood has piloted stock RWAs, offering tokenized private equity in companies like SpaceX and OpenAI, enabling retail investors to gain exposure to pre-IPO companies—an innovation that has drawn global attention in finance.

In the U.S., the stablecoin and RWA sectors are booming, with giants like PayPal, Robinhood, and Nasdaq entering the space. In Europe, nine major banks plan to jointly launch a compliant euro stablecoin next year. In Hong Kong, the launch of an HKD stablecoin is imminent, with over 77 companies having submitted expressions of interest. Meanwhile, under regulatory supervision, Hong Kong’s RWA primary market pilots have been running for more than two years, with about 30–40 projects currently active.

However, a surge of mainland Chinese banks, brokerages, and technology companies has led to overheating in Hong Kong’s stablecoin and RWA sectors. Amid rising market and media hype, mainland regulators have opted to cool the sector.

The Hong Kong stablecoin and RWA scene is now seeing its first major exits.

Localized Cooling

Cooling signals appeared around the formal implementation of Hong Kong’s stablecoin regulations, but these have been localized.

In early August, the author attended a Hong Kong conference where multiple financial and technology firms announced stablecoin license applications and ambitions in the RWA sector. Yet almost overnight, all financial institutions, technology companies, and pilot participants involved in Hong Kong stablecoins cancelled interviews and suspended all public discussion.

On August 1, 2025 (UTC), Hong Kong officially implemented its Stablecoin Ordinance, establishing the world’s first comprehensive legal framework for stablecoins. In the days leading up to its enactment, a regulatory guidance document was distributed to financial institutions.

Foresight News learned from sources that mainland regulators instructed financial institutions to keep a low profile regarding stablecoin activities and communications, avoid excessive publicity or hype, and strictly manage internal research and public sentiment.

“You can do, but you can’t talk,” a source said.

According to a Caixin report from September 11 (UTC), an insider revealed that Hong Kong’s stablecoin business is still in its infancy with an uncertain outlook, and excessive participation from mainland institutions may pose risks—thus, risk isolation is required. Another industry veteran noted that previously proactive mainland banks and central SOE branches in Hong Kong, including Bank of China (Hong Kong), Bank of Communications (Hong Kong), China Construction Bank (Asia), and CMB Wing Lung Bank, may now postpone their stablecoin license applications. Bank of China (Hong Kong) is one of the city’s three note-issuing banks.

Morgan explained the regulatory stance to Foresight News: First, Chinese institutions are prohibited from conducting Hong Kong crypto business on the mainland and must be cautious with virtual asset operations; second, mainland capital is not allowed to flow in; and third, parent companies of Chinese financial institutions are responsible for compliance.

In summary, mainland regulators are chiefly concerned about a rush of financial institutions and technology firms entering Hong Kong’s crypto market, and have already directed some to withdraw from stablecoin and RWA activities. Meanwhile, local “non-mainland” financial institutions in Hong Kong continue to conduct crypto business as usual.

The pace of stablecoin license issuance in Hong Kong may mirror the earlier rollout of crypto exchange licenses: the first VASP (Virtual Asset Service Provider) batch had only one or two licensees, while the second batch included seven or eight.

Sources told Foresight News that several crypto exchanges will officially launch in Hong Kong by year-end. The first companies with VASP licenses, like HashKey, launched in August 2023 (UTC) and have now been operating for over two years.

When and Where Will It Heat Up?

Since the beginning of 2025, the U.S. crypto market has continued to heat up—across exchanges, ETFs, stablecoins, RWA, and DAT. However, Hong Kong is following its own pace.

Morgan noted that Hong Kong’s RWA primary market pilot has run for over two years, with 30–40 projects typically in the range of HKD 10–20 million. “In theory, Hong Kong’s RWA secondary market is viable, and some institutions may already be applying,” Morgan said.

The same goes for stablecoins. The Hong Kong Stablecoin Issuer Sandbox launched on March 12, 2024 (UTC), and has operated for about a year and a half. Since the stablecoin licensing ordinance took effect, the Monetary Authority received 77 expressions of interest in August. Insiders predict the first batch of licenses will be issued by year-end or early next year.

Hong Kong’s crypto market cooled in a single night—and any localized or sudden rebound could happen just as quickly.

Global developments are rapidly affecting Hong Kong. The progress of stablecoins and RWA in the U.S., Europe, South Korea, and elsewhere is influencing Hong Kong’s own trajectory. On September 25 (UTC), nine leading European banks jointly announced a euro stablecoin governed by the EU’s MiCA regulation. The group stated the project would provide a true European alternative to the U.S.-dominated stablecoin market and strengthen Europe’s strategic autonomy in payments. The stablecoin is slated for launch in the second half of 2026.

The DAT (Digital Asset Treasury) sector is one Hong Kong track that has yet to take off. For example, Yunfeng Financial, a so-called “Jack Ma crypto concept stock,” accumulated 10,000 ETH on the open market as of September 2 (UTC), listing the tokens as investment assets and indicating plans to diversify its strategic reserves into BTC, SOL, and other leading digital assets. Yunfeng’s stock price has risen 65.09% in the past month.

In the U.S., sectors like ETFs, stablecoins, RWA, and DAT are all thriving, while Hong Kong is still exploring these areas with measured caution.

Exits and Entrants

Many are entering, and many are leaving.

From the first crypto exchanges like HashKey and OSL, to participants in spot Bitcoin ETFs such as China Asset Management, and now to stablecoins, RWA, and DAT, the crypto sector offers a multitude of opportunities—attracting waves of financial institutions and technology companies eager for a share.

The VASP license has drawn in brokerages like Futu Securities, Tiger Brokers, and Victory Securities; spot Bitcoin and Ethereum ETFs have brought in wealth managers such as China Asset Management and Bosera Funds; stablecoins have attracted banks like BOCI and Standard Chartered; DAT has attracted publicly listed companies like Yunfeng Financial, which have begun including digital assets on their balance sheets. The crypto industry is integrating deeply into Hong Kong’s financial system.

A temporary exit does not indicate a permanent withdrawal. Just as the internet transformed finance—where nearly all brokerages and banks are now internet-based—the integration of crypto and finance may ultimately become seamless. Early movers assume greater risks but also have the potential for higher rewards.

Note: “Morgan” and “Lee” are pseudonyms.

Statement:

1. This article is republished from [Foresight News], with copyright held by the original author [Zhou Zhou, Foresight News]. If you have concerns about this republication, please contact the Gate Learn team for prompt resolution according to relevant procedures.
2. Disclaimer: The views expressed are those of the author alone and do not constitute investment advice.
3. Other language versions were translated by the Gate Learn team. Do not copy, distribute, or plagiarize these translations without referencing Gate.