Hong Kong Monetary Authority Warns Excessive Stablecoin Market Excitement

The Hong Kong Monetary Authority (HKMA) has issued multiple warnings about the overheated market enthusiasm surrounding stablecoins, cautioning companies—especially those without a core business in digital assets—against speculative ventures. HKMA CEO Eddie Yue emphasized that many firms are still at the conceptual stage without concrete plans or risk management capabilities, and he warned that a speculative bubble may be forming, as stock prices of some companies surged merely based on their stablecoin intentions. With the stablecoin licensing regime starting August 1 after the May passage of the stablecoin bill, over 40 firms plan to apply, but fewer than 10 licenses are expected to be granted initially. The HKMA is also preparing to publish guidelines on regulation and anti-money laundering by the end of July to accompany the licensing process. This cautious stance follows a rise in stablecoin market capitalization to over $269 billion, partly driven by the recent U.S. GENIUS stablecoin legislation. The regulator's approach highlights its intent to maintain strict controls to prevent risks associated with vague stablecoin proposals and speculative trading.