The Hong Kong Legislative Council has passed the Stablecoin Bill, establishing a licensing and regulatory framework for ‘fiat stablecoin issuers’. By the end of this year, compliant Hong Kong stablecoins are expected to be officially launched. Stocks related to this concept have recently shown significant market activity.
Currently, three groups hold the first batch of sandbox positions for stablecoin issuers with the Hong Kong Monetary Authority (HKMA). The first is RD InnoTech, the second is JD Coin Chain Technology (Hong Kong), and the third is a consortium comprising Standard Chartered Bank (Hong Kong) Limited, Animoca Brands Limited, and Hong Kong Telecommunications (HKT) Limited.
Key Stocks in the Stablecoin Ecosystem
Lianlian DigiTech Co., Ltd. (2598.HK)
This company primarily provides digital payment services and value-added services. Its subsidiary, Lianlian International, is collaborating with RD InnoTech on a project exploring the use of stablecoins in cross-border payment scenarios. Last year, its revenue increased by 27.9% year-on-year to RMB 1.315 billion. The company’s net loss narrowed from RMB 656 million in 2023 to RMB 167 million, with an adjusted profit of RMB 78.7 million. Its core business shows strong growth momentum, with the total payment volume (TPV) for global and domestic payments surging 64.7% year-on-year to exceed RMB 3.3 trillion. The overall gross profit margin was 51.9%. The group also holds a Hong Kong VATP license. As it actively expands its global payment footprint and pursues a forward-looking Web3.0 strategy, these are expected to be the main highlights for future performance growth.
ZhongAn Online P&C Insurance Co., Ltd. (6060.HK)
ZhongAn Bank (in which ZhongAn holds a 43.43% stake) is the first digital bank in Hong Kong to provide reserve banking services for stablecoin issuers and the first bank in Asia to offer cryptocurrency trading services to retail users, indicating an early strategic layout in the virtual asset sector. ZhongAn indirectly holds an 8.7% stake in RD InnoTech, one of the three participating sandbox institutions. The market anticipates ZhongAn will benefit in two key ways: 1) from the potential valuation increase of RD InnoTech, and 2) from substantial net interest margin opportunities.
JD.com, Inc. (9618.HK)
JD Coin Chain Technology has entered the second phase of sandbox testing. It is developing a stablecoin (JD-HKD) linked to the digital yuan, with a focus on testing applications in cross-border payments and supply chain finance.
Standard Chartered PLC (2888.HK) & HKT Limited (6823.HK)
Standard Chartered Bank (Hong Kong), in partnership with Animoca Brands and HKT, has established a joint venture focused on issuing a Hong Kong dollar-denominated stablecoin. The project is currently in the later stages of sandbox testing, with the goal of reducing currency exchange costs within the Greater Bay Area.
OSL Group (863.HK)
As a leading compliant digital financial infrastructure platform in Asia and the only listed company in Hong Kong focused exclusively on digital assets, OSL Group reported a record-high revenue of HKD 375 million last year, a 79% year-on-year increase. Profit from continuing operations reached HKD 55 million, a significant turnaround from a loss of HKD 250 million in 2023. The group has long been established in the virtual asset领域. With the passage of the Stablecoin Bill in Hong Kong, the group is well-positioned to benefit from the new regulatory environment.
New Huo Technology Holdings Ltd. (1611.HK)
This company primarily provides virtual asset trading and technical solution services. These include virtual asset lending, asset management for clients, and operating an over-the-counter (OTC) trading platform that functions as an exchange. If trading volume in the cryptocurrency market increases, the group's transaction business revenue could also rise. The company stands to benefit from Hong Kong's ongoing push to become an international Web3 and digital finance hub.
Rising Market Interest in Stablecoins
Stablecoins have become a hot topic in capital markets. Hong Kong is a first-mover, having passed its Stablecoin Bill, making it the first jurisdiction globally to establish a comprehensive regulatory framework for fiat-backed stablecoins. Compliant Hong Kong stablecoins are expected to be operational by the end of this year. In a parallel development, the U.S. Senate recently passed a procedural vote on the Generate Necessary Enforcement and Uniform Stability (GENIUS) Act of 2025, seeking to provide federal oversight for dollar-pegged stablecoins. Its potential passage is anticipated to significantly drive institutional investment into the stablecoin market.
Furthermore, Circle, the issuer of USDC—the world's second-largest stablecoin—has initiated its IPO process on the New York Stock Exchange, planning to list under the ticker "CRCL" with a target valuation of approximately $6.7 billion. A successful listing would make it the first publicly traded company focused primarily on stablecoin operations, serving as a major milestone for the integration of crypto assets with traditional finance.
Recently, Bitcoin successfully surpassed the $110,000 mark, reaching a new all-time high. With a total market capitalization of nearly $2.18 trillion, Bitcoin now ranks as the fifth-largest asset by market value globally, behind only gold, Microsoft (MSFT.US), NVIDIA (NVDA.US), and Apple (AAPL.US). The sustained升温 of market interest in Bitcoin has further intensified focus on the development of stablecoins.
👉 Explore real-time market analysis tools
Understanding Stablecoins: Uses and Features
Within the cryptocurrency market, stablecoins have consistently served as a buffer against price volatility. Notably, USDT and USDC dominate the market, holding a combined share of nearly 90%.
Key Characteristics of Stablecoins:
- Pegging Mechanism: Both USDT and USDC are backed 1:1 by reserve assets in U.S. dollars, maintaining price stability through the issuer's commitment to redemption.
- Reserve Asset Structure: Reserves primarily consist of highly liquid assets like cash and short-term U.S. Treasury bills (as of 2024, U.S. Treasury holdings accounted for over 80% of the reserves for both USDT and USDC).
- Regular Transparency Reports: Monthly or quarterly attestation reports are published, with third-party firms verifying the sufficiency of the underlying assets.
- Market Adoption: They are widely accepted across numerous exchanges and decentralized finance (DeFi) protocols.
Application Scenarios for Stablecoins:
- "Safe Haven" within Crypto Markets: During periods of high volatility in assets like Bitcoin, investors can convert their holdings into stablecoins to hedge risk, avoiding the fees and tax implications of frequent conversion back to fiat currency.
- Cross-Border Payment and Remittance Tool: Traditional cross-border remittances carry an average fee of 6.3% (World Bank data), whereas transfers using stablecoins can be completed within seconds for a cost of less than 1%.
- DeFi Ecosystem Infrastructure: In the decentralized finance space, stablecoins are the core collateral used in lending protocols, derivative trading, and yield farming.
Conclusion and Future Outlook
Following the implementation of the Stablecoin Ordinance, any entity issuing a fiat-referenced stablecoin in Hong Kong, or issuing such a stablecoin outside Hong Kong that references the Hong Kong dollar, must obtain a license from the Hong Kong Monetary Authority. Licensees must comply with regulations concerning the management of reserve assets and redemption. Companies holding Hong Kong VATP licenses are poised to benefit, potentially unlocking new revenue streams in this promising field.
The Stablecoin Ordinance is set to propel Hong Kong's status as an international Web3 and digital financial hub. It will also support the internationalization of the Renminbi and the development of offshore financial businesses, laying a solid foundation for the future potential launch of an offshore Renminbi stablecoin in Hong Kong.
Frequently Asked Questions
What exactly is a stablecoin?
A stablecoin is a type of cryptocurrency designed to maintain a stable value by being pegged to a reserve asset, most commonly a fiat currency like the U.S. dollar. This stability is achieved through holding reserves equivalent to the amount of stablecoins in circulation.
Why are stablecoins important for the crypto market?
They provide crucial price stability in an otherwise volatile market. They act as a safe haven for investors during market downturns, serve as a base trading pair on exchanges, and are fundamental building blocks for decentralized finance (DeFi) applications like lending and borrowing.
How is Hong Kong's approach to stablecoin regulation significant?
Hong Kong is one of the first major jurisdictions to introduce a comprehensive licensing framework specifically for fiat-backed stablecoins. This move provides regulatory clarity, aims to protect consumers, and encourages institutional participation, potentially positioning Hong Kong as a leader in the regulated digital asset space.
What is the difference between USDT and USDC?
Both are major dollar-pegged stablecoins. The primary differences often lie in their transparency and reserve composition. USDC is known for its regular, detailed attestations from major accounting firms, while USDT (issued by Tether) has faced more scrutiny in the past regarding its reserves but also provides regular reports.
Can stablecoins be used for everyday purchases?
While their primary use is within digital asset ecosystems, adoption for everyday payments is growing. Some payment processors and merchants now accept stablecoins directly, leveraging their low transaction fees and fast settlement times compared to traditional systems.
What are the risks associated with using stablecoins?
Key risks include the potential for the issuer to become insolvent and unable to honor redemptions, the quality and liquidity of the underlying reserve assets, and regulatory changes that could impact their operation. Using regulated and transparent issuers can help mitigate these risks.