Stablecoin, which runs in Hong Kong, suffered double-digit losses on Friday amid a local regulatory shift and broader market corrections.
Bright smart securities and commodity groups Leap of nearly 20% Friday, according to Google Finance data. Yunfeng Financial Group Falled During the fair, more than 16% slip 11% and OSL groups reject 10.5%.
These companies are known as “Hong Kong Stablecoin-Concept Companies” and their share prices are affected by share issuance, custody, transactions or related infrastructure. Nevertheless, some local experts still see corrections as positive market adjustments.
Allen Huang, a senior Stablecoin policy researcher at the Hong Kong University of Science and Technology, said it was a “health correction”. Huang told Cointelegraph: “There are signs that the stable Frenzy has spilled into other financial markets, including the stock market.”
In Hong Kong’s financial markets, it is precisely in the midst of a wider recession. On Friday, the Hang Seng Index closed more than 1%, while the Hang Seng SmallCap Index fell 1.54% during the meeting. The Hang Seng Tech index lost 1.02%.
Related: Python Network brings Hong Kong stock price ONCHAIN for global access
Healthy market correction
Stocks fell in Hong Kong A six-month transition period With special rules transitioning to it New Stablecoin framework. New regulations are here too Plans are criminal The region has no authorized stabilization protein promotion.
Huang is not the only expert who believes that this sell-off is just a sensible market dynamic.
Xu Han, director of liquid fund at the Hong Kong licensed Hashkey Group, said: “The selling of ‘Stablecoin Concept’ stock is a reasonable market correction.
He explained that rigorous regulation, including the need for one-to-one full reserves, one-day redemption and a minimum capital of $25 million ($3.18 million), “is a strategy to deliberately prioritize the stability and credibility of the system.” He concluded:
“Corrective measures filter short-term speculation and fundamentally strong players are able to anchor Hong Kong’s reputation as a digital asset hub for global trust.”
“The sell-off of today’s ‘Stablecoin Concept’ shares could be a healthy correction after speculative gains,” said Niko Demchuk, head of compliance at Crypto Forensics, a Hong Kong-operated company in Ammlbot. According to Demchuk, the high licensing requirements and challenges faced by small companies also weighed on “market recalibration.”
Shukyee MA, chief strategy officer of Hong Kong’s real-life asset token company Plume, seems to agree with other experts. He concluded: “This decline represents a healthy market correction driven by profit harvests and regulatory clarity.”
Related: China’s JD.com registers “Jcoin” before Hong Kong’s Stablecoin system
Many people expect to leave the game
Huang said that with the new rules being formulated, “some agencies are considering trying Stablecoin and may decide not to continue the process.” Based on network effects and economies of scale, early licensors will benefit from the advantages of the first step, he said. He added:
“For those expected to be excluded from the first batch, they will face an uphill battle to change their cost-benefit analysis. It’s also a way to increase the likelihood of licensees’ commercial success.”
Jack Ma said the regulatory transition period will allow smaller companies or those looking for stable companies to guess their efforts or transfer jurisdictions. Still, he hopes that well-funded players will follow the guidelines and bear the compliance costs.
Demchuk also hopes that the six-month regulatory transition period “pushing capital mergers that could become stable issuers”, resulting in only a small number of licenses. He also hopes that the bank will act as a custodian, prioritize partnerships with former closure licences and further reshape the market to large issuers.
Hong Kong and the United States are stable in the game
“In the short term, the number of stablecoins supported by Hong Kong cannot be comparable to stablecoins supported by the U.S. dollar,” Huang said. Jack Ma still noted that China has the second largest market share in exports, adding:
“Strict rules really make HKD-Stablecoin issuers a major provider of viable international trade stability.”
Demchuk added that Hong Kong’s Stablecoins “could gain a strategic advantage in cross-border payments and utilize the status of its financial center and strict regulation. Nevertheless, he said: “With market adoption and infrastructure development, batch growth of Defi or Defi or payments is unlikely until 2027.”
https://www.youtube.com/watch?v=ry9mi57pbjs
Magazine: Hong Kong Hose down stablecoin frenzy, Pokémon on Solana: Asian Express
