Hong Kong regulators warn against stablecoin hype following market swings
Authorities urge caution as speculation over licensing fuels volatility
Hong Kong’s top financial regulators have warned investors to stay vigilant after a wave of abrupt market swings linked to corporate announcements and online chatter about stablecoin licensing.
In a joint statement last week, the Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority (HKMA) said speculation over plans to apply for or obtain stablecoin licences had triggered frenetic movements in share prices.
“Recent share price movements associated with the stablecoin concept underscore the importance for investors to be clear-minded about the risks involved and the potential financial losses from making relevant investments,” said Julia Leung, Chief Executive Officer of the SFC.
The joint statement highlighted how speculation—often fuelled by company press releases, news reports or social media posts—has caused spikes in share prices, despite the significant uncertainty surrounding the outcome of licence applications.
Authorities reminded market participants that misleading statements or hype-driven claims could expose investors to undue risks.
The warning comes following Hong Kong's new licensing framework for stablecoin issuers. Under rules introduced at the start of August, firms seeking to issue or operate fiat-referenced stablecoins must obtain approval from the HKMA.
The bar for approval is deliberately high, with only a limited number of licences expected to be granted. Regulators stress that expressions of interest or early-stage discussions with applicants do not indicate endorsement or likely approval.
Eddie Yue, Chief Executive of the HKMA, added that the regulator had adopted a "rigorous and prudent approach in assessing applications for stablecoin issuer licence".
“We have been in preliminary communication with dozens of parties regarding stablecoin licensing as part of our market engagement. The approval thresholds set are high, and only a handful of licences will be granted initially," he said.
"Such communication, or the related indication of interest or application, is not an indicator of approval or endorsement of any entity's prospects.”
