Hong Kong’s top financial regulators have issued a rare joint warning, cautioning investors over heightened market volatility driven by speculation surrounding stablecoins.
In a joint statement Thursday, the Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC) said recent stock fluctuations tied to the "stablecoin concept" underscored the risks of irrational investment behavior during speculative market surges.
The statement noted that the volatility appeared to stem from news reports, social media chatter and company announcements referring to potential applications for stablecoin issuer licenses under a new regulatory regime.
The caution comes as Hong Kong launches its new licensing framework for fiat-referenced stablecoin issuers. The Stablecoin Ordinance took effect Aug. 1, opening a two-month application window that closes on Sept. 30. The rollout has unleashed a wave of corporate maneuvering, with companies jostling for first-mover advantage — and a stock market frenzy regulators are now trying to control
Eddie Yue, HKMA’s chief executive, said the authority would apply strict criteria in assessing license applications, repeating that only a limited number of approvals were likely in the initial phase.
Julia Leung, the SFC’s chief executive, added that the agency would continue to closely monitor trading activity and was ready to act decisively against misconduct that threatens market integrity or investor safety.
Although the regulators did not name specific firms, a number of listed companies have seen stock prices surge on announcements or rumors linked to stablecoin ambitions.
The first to publicly declare its intent was Anchorpoint Financial Ltd., a joint venture formed by Standard Chartered Bank (Hong Kong), HKT and Animoca Brands Corp. Ltd. On Aug. 8, Anchorpoint said it had formally expressed interest in a license on Aug. 1, the day the ordinance took effect.
Investor excitement intensified on Aug. 12, when Tencent News reported that Fosun International Chairman Guo Guangchang led a delegation to meet with Hong Kong Chief Executive John Lee and Financial Secretary Paul Chan on Aug. 6 to discuss plans for a stablecoin license.
Shares of Fosun jumped as much as 27.5% that day to HK$6.81 ($0.87), before retreating to close Thursday at HK$5.55.
The same day, RD Technologies CEO Liu Yu told local newspaper Ming Pao that his company was a key proponent of stablecoin development in Hong Kong and would “go all out” to compete for a license, citing its participation in HKMA’s sandbox program. He declined to confirm whether an application had been submitted.
Other companies have joined the speculation more indirectly. On Aug. 11, IVD Medical Holding Ltd., a distributor of diagnostic devices, disclosed plans to invest up to HK$880 million ($112.5 million) in Ethereum. It had already purchased shares worth HK$150 million, sparking a 27.55% rally in its stock. But the shares had dropped to HK$8.64 by Thursday, down 32.8% from the Aug. 12 peak of HK$12.86.
Digital asset stocks also surged on Aug. 13 as the broader Hang Seng Index jumped more than 600 points. Sinohope Technology Holdings Ltd. soared 30%, while OKG Technology Holdings Ltd. rose 26%.
Regulators urged market participants to communicate responsibly and avoid statements that might mislead investors or create unrealistic expectations. The SFC said it uses advanced systems and a dedicated surveillance team to track unusual trading patterns and would not hesitate to take enforcement action.
Similar warnings have also emerged on the Chinese mainland. Since July, authorities in Shenzhen, Beijing, Suzhou and Zhejiang have issued alerts about illegal financial schemes masquerading under new financial terms such as "stablecoins." Brokerage firms in those regions have reportedly been instructed to halt roadshows and public commentary on the topic.
Contact reporter Han Wei (weihan@caixin.com)
