Stablecoin-Linked Stocks Fall Steeply
Stablecoin-focused companies listed in Hong Kong fell in double digits Friday when new regulations took effect. Bright Smart Securities fell close to 20%, Yunfeng Financial lost more than 16%, Guotai Junan lost 11%, and OSL Group fell 10.5%, according to Google Finance.
These companies are termed “stablecoin-concept stocks” because of their vulnerability to digital asset infrastructure. Even with the dramatic falls, analysts recommend the decline is a necessary adjustment, not a panic.
Regulatory Shift Triggers Market Repricing
The fall follows Hong Kong entering a six-month regulatory period to legalize stablecoin regulation. New rules include criminalizing unlawful promotion of unlicensed stablecoins and stringent issuance requirements, including one-to-one reserves, prompt redemptions, and a HK$25 million minimum capital requirement.
Hong Kong University of Science and Technology stablecoin researcher Allen Huang said the fall signifies “a healthy correction” and sign of reduced speculative mania.
Experts Welcome the Market Reset
HashKey Group’s Xu Han also emphasized that the correction is reasonable, helping to purge short-term speculation while being a boost for Hong Kong’s pursuit of systemic stability.
Niko Demchuk at AMLBot concurred, citing the new licensing requirements will drive out smaller businesses and induce market consolidation. “It’s a market recalibration,” he explained.
Shukyee Ma, chief strategy officer at Plume, also described the drop as profit-taking and clarification-driven, as opposed to structural weakness.
Smaller Players Will Fall Out of the Race
The new regime will discourage some firms from pursuing stablecoin businesses. Huang stated that network effects and economies of scale will only benefit early license holders, with others replanning.
Demchuk expects banks and institutional custodians to follow market leaders and enhance the market leadership of well-capitalized issuers.
Competitive Prospects: Hong Kong vs. U.S.
While Hong Kong-backed stablecoins will not approach consistent U.S. dollar-backed volume in the near future, Ma says, China’s export prowess positions HKD-stablecoins favorably for settling trade.
Some regulatory influence, Demchuk also claimed, will place Hong Kong to lead the way in cross-border payments and DeFi—though sustained volume expansion won’t occur until at least 2027.
