Original Article Title: "Exclusive | Hong Kong Stablecoin, First Batch of Players Exit"

Original Article Author: Zhou Zhou, Foresight News

Hong Kong's stablecoin and the RWA market have seen the first wave of exits.

On September 29, sources revealed to Foresight News that at least four Chinese-backed financial institutions, including Guotai Junan International, have recently, out of prudence, withdrawn their Hong Kong stablecoin license applications or postponed their related attempts in the RWA track.

A senior executive at a Hong Kong financial institution, Morgan, told Foresight News that some Chinese banks have taken a more cautious approach after receiving guidance from regulators in the stablecoin track, with several institutions choosing to postpone entry. Industry insiders pointed out that the Hong Kong Monetary Authority has set two important deadlines for market participants: expressing intention to apply before August 31 and submitting the formal application before September 30. This means that institutions that have not submitted their applications by tomorrow will miss the first batch of stablecoin licenses.

In terms of Real World Assets (RWA), some Chinese institutions have also postponed related business attempts due to regulatory guidance. Lee, a practitioner close to a Chinese securities firm, revealed to Foresight News that several institutions, including Guotai Junan International, have paused their RWA-related operations in Hong Kong, and Guotai Junan's RWA business has been suspended. Lee also disclosed that another Chinese securities firm listed on the A-share market has received a notice to stop its ongoing RWA attempts in Hong Kong.

Within the industry, some practitioners believe that stablecoins are also a subtype of RWA. The essence of a US Dollar stablecoin is to tokenize the real-world asset of the US Dollar.

Real World Assets (RWA) tokenize assets in the real world. The most common types currently include US Stock RWA (stock tokenization), US Treasury RWA (treasury bond tokenization), Gold RWA (gold tokenization), and so on. As an emerging industry, RWA has developed rapidly in the United States. For example, the US's largest online brokerage, Robinhood, has tried to launch Stock RWA (stock tokenization), tokenizing private equity of well-known companies like SpaceX and OpenAI, allowing retail investors to buy tokenized equity of unlisted companies, attracting global attention from the financial industry.

In the United States, stablecoins and RWAs are developing rapidly, with giants such as Paypal, Robinhood, and Nasdaq all entering the field. In Europe, nine major European banks have announced that they will jointly launch a compliant Euro stablecoin next year. In Hong Kong, the launch of an HK Dollar stablecoin is imminent, with over 77 companies having submitted stablecoin license application intentions. Meanwhile, under the supervision of regulators, Hong Kong's RWA has been piloted in the primary market for over two years, with currently thirty to forty projects in operation.

However, in response to the frenzy of Mainland institutions from industries such as banking, securities, and the internet rushing into the Hong Kong stablecoin and RWA track, a situation that was becoming overly heated, Mainland regulatory authorities have chosen to cool things down.

The Hong Kong stablecoin and RWA track have seen the first wave of exits.

Partial Cooling Down

Following the official implementation of the Hong Kong Stablecoin Regulations, the market has begun to show signs of cooling down, albeit only partially.

In early August, I attended a conference in Hong Kong where multiple financial institutions and internet companies announced their applications for stablecoin licenses and actively entered the RWA track. However, almost overnight, all financial institutions, internet companies, and organizations entering the Hong Kong stablecoin sandbox that were involved in Hong Kong stablecoin canceled external interviews and all public discussions regarding stablecoin.

On August 1, 2025, Hong Kong officially implemented the "Stablecoin Regulations," establishing the world's first comprehensive regulatory framework for stablecoin. In the days leading up to the official implementation of the regulations, guidance was issued to various financial institutions.

Foresight News learned from insiders that Mainland regulatory authorities have conveyed relevant guidance to financial institutions, requiring institutions to maintain a low profile in their stablecoin-related businesses and statements, refrain from excessive promotion or creating public opinion hotspots, and strictly conduct internal research and public relations management.

"You can do, but you cannot say," said the insider.

According to a September 11 report by Caixin, an informed source revealed that Hong Kong's stablecoin business is still in its early stages, and its future direction is unclear. An excessive participation of Chinese institutions may bring risks; therefore, it is necessary to first isolate risks. Another senior industry insider stated that previously more proactive Chinese banks and state-owned enterprises in Hong Kong, such as Bank of China Hong Kong, Bank of Communications Hong Kong, China Construction Bank (Asia), and Industrial and Commercial Bank of China (Asia), may postpone the submission of Hong Kong stablecoin license applications. Among them, Bank of China Hong Kong is one of the three note-issuing banks in Hong Kong.

Morgan provided insight to Foresight News on the regulatory attitude: firstly, Mainland Chinese institutions engaged in Hong Kong's encrypted business are prohibited from expanding domestically and should cautiously participate in virtual asset-related businesses; secondly, Mainland funds are prohibited from flowing in; thirdly, the parent company behind Chinese financial institutions must bear compliance responsibilities.

In conclusion, current Mainland regulatory authorities are mainly concerned about the rush of Chinese financial institutions and internet companies into the Hong Kong crypto market and have already guided some Chinese institutions to withdraw from stablecoin and RWA businesses. Meanwhile, local "non-Chinese financial institutions" in Hong Kong are still orderly conducting cryptocurrency-related businesses.

The pace of issuance of Hong Kong stablecoin licenses may be similar to that of previous Hong Kong cryptocurrency exchanges. For example, only one or two institutions in the first batch of institutions to receive the VATP cryptocurrency exchange license in Hong Kong, while the second batch of license recipients had seven or eight.

An insider told Foresight News that by the end of the year, several cryptocurrency exchanges such as Futu and Victory Securities will be officially operational in Hong Kong. The first companies to receive VASP licenses, such as HashKey, officially launched and began providing trading services as early as August 2023, which was over two years ago.

When Will the Heat Rise and Where?

Starting in 2025, the entire U.S. crypto market has been heating up, from exchanges, ETFs, stablecoins, RWAs, to DAT, and the hotspots of the U.S. crypto market have never ceased. However, Hong Kong has its own rhythm.

Morgan said that Hong Kong's RWA has been piloting in the primary market for over two years, with currently three to four dozen projects running, mostly with project sizes in the range of one to two million Hong Kong dollars. "In theory, a secondary market for Hong Kong's RWA can be established, and there may even be institutions already applying," said Morgan.

The same goes for Hong Kong's stablecoin. Hong Kong's Stablecoin Issuer Sandbox was officially launched on March 12, 2024, and has been running for about a year and a half. Following the enactment of the Hong Kong Stablecoin License Regulation, the HKMA received 77 stablecoin license application intentions in August. Insiders predict that the first batch of stablecoin licenses will be issued by the end of this year or early next year.

The cooling of the Hong Kong crypto market can happen overnight, and similarly, the local warming, sudden warming, or perhaps even cooling in the Hong Kong crypto market may also occur in an instant.

The changing international situation is also rapidly affecting the Hong Kong crypto industry. The progress on stablecoins and RWAs in the United States, Europe, South Korea, and other regions is influencing Hong Kong's progress. On September 25, nine major European banks jointly launched a Euro stablecoin subject to the EU’s Markets in Crypto-Assets Regulation (MiCA). Participating banks stated that the plan would provide a genuine European alternative to the U.S.-led stablecoin market and help enhance Europe's strategic autonomy in the payment sector. This stablecoin is expected to be issued for the first time in the second half of 2026.

DAT (Digital Asset Treasury) is also a track where Hong Kong has not yet exerted its efforts. For example, "Jack Ma's Cryptocurrency Concept Stock" Yunfeng Financial accumulated 10,000 ETH in the open market on September 2, listing ETH as an investment asset in the financial report, and indicating plans to explore the inclusion of diversified mainstream digital assets such as BTC, SOL, in addition to Ethereum, as strategic reserve assets. In the past month, Yunfeng Financial's stock has surged by as much as 65.09%.

In the United States, the crypto track, such as ETFs, stablecoins, RWAs, and DAT, has seen a comprehensive warming trend, with the market enthusiasm soaring; in contrast, Hong Kong is still taking a cautious and restrained approach to similar tracks.

Exiters and Newcomers

Many newcomers, many exiters.

From the first batch of cryptocurrency exchanges like HashKey and OSL, to participants in Bitcoin spot ETFs like Huaxia Fund, and now to stablecoins, RWAs, DAT, there are too many niche tracks to participate in the cryptocurrency field. This has led to a continuous influx of a large number of financial institutions and internet companies wanting to get a piece of the action.

The VASP license has attracted a group of brokerage institutions to join, such as Futu Securities, Tiger Brokers, and Victory Securities; Bitcoin and Ethereum spot ETFs have attracted a group of wealth management institutions, such as Huaxia Fund and Boshi Fund. Stablecoins have attracted a group of banks to join, such as BOCI, Standard Chartered Bank; DAT has attracted a group of Hong Kong-listed companies to join and be listed on the balance sheet, such as Yunfeng Financial... The cryptocurrency industry is fully integrating into the entire Hong Kong financial system.

Temporary exiting does not mean permanent defeat. Just as the internet has changed the financial industry, almost all brokerages are now internet brokerages, and all banks are also internet banks. The future integration of cryptocurrency and finance may be deeply boundless. The first batch of newcomers bears the greatest risk but also reaps the greatest rewards.

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