Hong Kong Crypto Firms’ Shares Surge Amid Regulatory Optimism

The shares of cryptocurrency companies in Hong Kong have risen, buoyed by investor optimism. Market participants anticipate the launch of a licensing system for stablecoin issuers.

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

The rise in stock prices is linked to recent successes of these companies. 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 for stablecoin issuance and is already purchasing bitcoin through the HashKey exchange.

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

The buzz around stablecoins is also linked to statements by the head of the People’s Bank of China. In June, Pan Gongsheng acknowledged that they are transforming the global payment infrastructure. Against this backdrop, the issuance of “stablecoins” pegged to the offshore yuan is actively discussed in the region.

Focus on B2B

IDA co-founder Sean Lee described Hong Kong’s regulation as “very progressive.” According to him, it allows for greater openness to international markets by permitting the issuance of multi-currency stablecoins.

However, Lee noted the high entry barrier to the market. In his view, Hong Kong is focused on B2B applications rather than retail users. This is partly due to the public’s low awareness of “stablecoins” and the already developed internal digital payment system.

In June, Hong Kong customs announced work on a tool designed to track cryptocurrency transactions aimed at money laundering.