The allure of stablecoins shows no signs of fading, as companies across Asia race to secure regulatory approval in anticipation of a booming digital asset economy. Recent market movements and strategic corporate announcements highlight growing institutional interest—particularly in Hong Kong, where new regulations are set to reshape the landscape for digital currencies, blockchain innovation, and Web3 adoption.
With the upcoming enforcement of Hong Kong’s Stablecoin Ordinance on August 1, 2025, firms are positioning themselves at the forefront of what could become a transformative shift in cross-border payments and financial infrastructure.
Market Surge Following Stablecoin Announcement
On July 2, executives from Dmall Digital Intelligence (02586.HK), a Hong Kong-listed technology firm specializing in retail digitization, revealed plans to apply for a stablecoin issuer license under the new regulatory framework. The announcement sent shockwaves through the market: shares surged nearly 90% intraday on July 3 before closing up over 23%.
This dramatic reaction underscores investor enthusiasm for any company aligning with blockchain-enabled financial services—even those outside traditional fintech domains. Dmall, founded in 2015, is recognized as China’s leading provider of digital retail solutions by both revenue and gross merchandise value, according to Frost & Sullivan data from 2023. It went public in December 2024, with its market cap fluctuating between HK$4 billion and HK$20 billion amid volatile trading conditions.
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Strategic Moves Into Web3 and Digital Assets
Dmall’s CFO, Tom Yip Fan Tong, emphasized the firm’s long-term conviction in cryptocurrency’s role in global commerce. He noted that stablecoins could significantly enhance cross-border payment efficiency for retailers—reducing costs and improving customer experience. To support this vision, Dmall has already acquired Bitcoin holdings and hired Web3 specialists to drive internal innovation.
In addition, the company entered a strategic partnership with HashKey Group, a major player in Hong Kong’s virtual asset ecosystem. Under the agreement, Dmall will open an account on HashKey Exchange and collaborate on digital asset trading, blockchain development, and ecosystem expansion—aiming to deliver next-generation digital finance tools to enterprise clients.
The news not only boosted Dmall’s stock but also lifted other so-called “stablecoin概念股” (concept stocks). On the same day, Victory Securities (08540) rose 14.51%, Guotai Junan International (01788) gained 11.56%, and China Everbright Holdings (00165) climbed 3.41%.
Regulatory Momentum Builds in Hong Kong
Hong Kong’s Financial Services and Treasury Bureau confirmed that the Stablecoin Ordinance will take effect August 1, 2025, at which point the Hong Kong Monetary Authority (HKMA) will begin accepting license applications. While formal submissions aren’t yet open, preparation is well underway.
The HKMA launched a stablecoin issuer sandbox in 2024, selecting three teams from over 40 applicants:
- JD Blockchain Tech (Hong Kong)
- Circle Innovation Technology
- A consortium comprising Standard Chartered Bank, Anthill Group, and Hong Kong Telecom
These participants have been testing issuance mechanisms and business models under controlled conditions—giving them a potential edge in the licensing process.
However, HKMA Chief Executive Eddie Yue was clear: participation in the sandbox does not guarantee a license. All applicants will be evaluated against strict criteria, including reserve management practices, compliance frameworks, technical security, and real-world use cases. Initially, only a handful of licenses are expected to be issued.
Competitive Landscape: Who Will Lead?
Several major players have signaled intent to enter the space. Ant International, the international arm of Alibaba’s financial affiliate, stated it intends to submit its application shortly after the ordinance takes effect, aiming to leverage stablecoins for cross-border payments and treasury operations.
Similarly, LianLian Digital, another Hong Kong-listed firm, is evaluating applications in both Hong Kong and Singapore, targeting submission soon after August 1.
Despite intense competition, experts suggest sandbox veterans may have stronger chances due to their deeper understanding of regulatory expectations.
“Firms that have gone through the sandbox are more likely to present compliant, well-structured applications,” said a stablecoin industry insider. “But ultimately, execution and credibility matter most.”
Can Stablecoin Issuers Actually Make Money?
While investor excitement runs high, questions remain about the long-term profitability of stablecoin issuance. The case of Circle Group, often dubbed the “first stablecoin IPO,” offers valuable insights—and warnings.
Circle went public amid massive investor demand, with its stock briefly rising close to tenfold. Its business model is straightforward: issue USDC, a dollar-pegged stablecoin, and invest the underlying fiat reserves in short-term U.S. Treasury bills to generate risk-free interest income.
According to Circle’s 2024 prospectus, it generated $1.676 billion in total revenue—of which $1.661 billion came from reserve income, accounting for 99% of total earnings.
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Risks Behind the Revenue Model
However, this model faces increasing scrutiny. In a recent report, JPMorgan highlighted key vulnerabilities:
- Interest rate dependency: Revenue hinges on yield from U.S. Treasuries. A declining rate environment directly compresses profit margins.
- Rising distribution costs: As exchanges demand higher fees for listing and promoting stablecoins, Circle’s cost base increases.
- The “scissor effect”: Falling yields combined with rising costs could severely erode margins.
- Low switching costs: Users can easily move between stablecoins like USDT, USDC, or emerging local variants.
- Competitive threats: New entrants may offer higher yields or better incentives to capture market share.
JPMorgan warns that if the current “winner-takes-most” dynamic breaks down, Circle’s economic advantages could diminish rapidly.
FAQ: Understanding the Stablecoin Opportunity
Q: What is a stablecoin?
A: A stablecoin is a type of cryptocurrency designed to maintain a stable value by being pegged to a reserve asset—most commonly the U.S. dollar. Examples include USDT and USDC.
Q: Why are companies interested in issuing stablecoins?
A: Stablecoins enable faster, cheaper cross-border transactions and open doors to decentralized finance (DeFi), tokenized assets, and global payment networks.
Q: Is issuing stablecoins profitable?
A: Currently, most profits come from investing reserve funds in low-risk instruments like U.S. Treasuries. However, this model is sensitive to interest rates and competitive pressures.
Q: How does Hong Kong’s new regulation affect stablecoin issuers?
A: The Stablecoin Ordinance introduces licensing requirements focused on transparency, reserve backing, cybersecurity, and consumer protection—raising barriers to entry but enhancing trust.
Q: Can traditional businesses benefit from launching stablecoins?
A: Yes—especially those in retail, logistics, or finance that handle international transactions. Stablecoins reduce friction and settlement times across borders.
Q: Are there risks for investors in stablecoin-related stocks?
A: Yes. Regulatory uncertainty, interest rate fluctuations, and unproven business models mean valuations can be volatile despite short-term hype.
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Final Thoughts: Hype vs. Sustainability
The surge in stablecoin-related equities reflects strong market sentiment—but sustainable success requires more than announcements. Real value will come from companies that combine regulatory readiness with practical use cases and resilient financial models.
As Hong Kong positions itself as a global hub for responsible digital finance innovation, the coming months will reveal which firms are truly prepared—and which are merely riding the wave.
For investors and enterprises alike, the message is clear: the era of digital currency integration has begun. The question isn’t whether to engage—but how to do so strategically, securely, and profitably.