Crypto stocks soar in Hong Kong as stablecoin momentum builds

Crypto-related stocks in Hong Kong jumped on Tuesday, driven by investor optimism over the region’s forthcoming stablecoin licensing framework.

Guotai Junan International, a Hong Kong-listed Chinese brokerage firm, saw its shares jump 16% as of noon, with the market still open, according to Yahoo Finance data. The securities firm obtained the regulatory approval to offer crypto trading services in Hong Kong last week.

Shares of OSL, a licensed crypto exchange in the city, climbed 12.2% as of Tuesday noon, while shares of Dmall Inc. rose 8.9%. Victory Securities' stock also leaped 9.2%.

OSL is one of the crypto trading platforms that have received licenses from the local regulator to offer retail services. It announced a C$85.2 million ($62.4 million) planned acquisition of the Canada-based Banxa exchange last month.

Dmall, a Chinese retail digitalization firm, said last week that it is preparing to apply for a stablecoin license in Hong Kong and has started to purchase bitcoin via HashKey exchange. Meanwhile, Victory Securities, a Chinese brokerage firm, gained regulatory approval to offer crypto trading services in April.

Investor enthusiasm comes as Hong Kong prepares to implement its stablecoin licensing regime on August 1. The upcoming framework mandates licensing from the Hong Kong Monetary Authority for issuers of fiat-referenced stablecoins.

In an interview with local newspaper Ming Pao published Monday, Christopher Hui, Secretary for Financial Services and the Treasury, said that Hong Kong may issue stablecoin licenses this year, but the number is likely to remain "in the single digits."

The excitement surrounding stablecoins also builds on remarks from Chinese central bank chief Pan Gongsheng in June. The People's Bank of China governor acknowledged that stablecoins and central bank digital currencies are reshaping the global payment infrastructure.

While Hong Kong's upcoming licensing regime and earlier sandbox programs were initially designed for Hong Kong dollar-pegged stablecoins, the prospect of offshore yuan-pegged stablecoins has become a hot topic locally. Chinese tech giants JD.com and Ant Group are lobbying China's central bank to approve offshore yuan-based stablecoins as the global stablecoin race intensifies, according to Reuters.