Hong Kong Crypto Stocks Surge on Positive Regulatory News

Shares of cryptocurrency companies in Hong Kong posted gains amid investor optimism. Market participants are expecting the launch of a licensing system for issuers of stablecoins.

Shares of brokerage firm Guotai Junan International rose 28%, according to Yahoo Finance. Shares of licensed crypto exchange OSL appreciated by 8%, while Dmall Inc. and Victory Securities rose 10% and 33%, respectively.

The rise in quotations is attributed to the companies' recent successes. Guotai Junan and Victory Securities have received regulatory approval to trade crypto assets. OSL is one of the platforms with a retail license. Dmall is preparing to apply to issue stablecoins, and is already buying Bitcoin through the HashKey exchange.

Investor interest is fueled by the impending implementation of rules for stablecoins on August 1. The new regime will oblige issuers to obtain a license from the Hong Kong Monetary Authority. According to Financial Services Minister Christopher Hui, the authorities may issue only a few such permits this year.

The excitement around stablecoins also stems from statements made by the governor of the People's Bank of China. In June, Pan Gongsheng recognized that they are changing the global payment infrastructure. Against this backdrop, the region is actively discussing the issuance of stablecoins pegged to the offshore yuan.

B2B Focus

IDA co-founder Sean Lee called the regulation in Hong Kong ”very progressive.” He said it leaves more openness to international markets by allowing the issuance of multi-currency stablecoins.

However, Lee noted the high threshold to enter the market. In his view, Hong Kong is focused on B2B applications rather than retail users. This is partly due to low public awareness of stablecoins and an already developed domestic digital payment system.