In recent days, shares of Hong Kong's stablecoin-related companies have shown a significant decline, attributed to local regulatory changes and a broader market correction.
Current State of the Stablecoin Market in Hong Kong
Companies tied to stablecoins in Hong Kong, including Bright Smart Securities, Yunfeng Financial Group, Guotai Junan, and OSL Group, have lost substantial portions of their share values. Bright Smart Securities fell by nearly 20%, Yunfeng by over 16%, Guotai Junan by 11%, and OSL by 10.5%. These firms are referred to as 'Hong Kong stablecoin-concept companies,' with their stock prices linked to stablecoin issuance, custody, and trading.
Experts' Reactions to Market Correction
Some experts view the situation as a positive market correction. According to Allen Huang, a senior stablecoin policy researcher at the Hong Kong University of Science and Technology, it is 'a healthy correction' indicating the redistribution of speculative assets. He noted that 'the sell-off is a rational market correction following months of speculative enthusiasm.' Other specialists, such as Shukyee Ma, emphasized that the drop was driven by profit taking and greater regulatory clarity.
Future Prospects and Expectations
With the transition to new regulations, some companies may reconsider their efforts in the stablecoin sector. Allen Huang noted that market reactions could lead to capital consolidation among potential stablecoin issuers. During the six-month transition period, smaller firms may pause their activities or switch jurisdictions, yet larger players are expected to comply with the new requirements.
Despite the current drop in stock values, experts are optimistic that this market adjustment will pave the way for greater stability and trust in the future.
