The wind is turning favorable? Crypto enthusiasts flock to Hong Kong, compliance drives the Web3 industry to accelerate reshuffling

Author: ChainCatcher, Lisa

On August 28, 2025, the Hong Kong Convention and Exhibition Centre was bustling with activity as the Bitcoin Asia 2025 conference commenced, lasting for two days. As the most influential Bitcoin industry event in Asia, this conference gathered over a thousand global cryptocurrency industry practitioners, policymakers, and investors, including prominent guests such as Legislative Council member Wu Jiezhuang and SFC Executive Director Dr. Eric Yip, who engaged in in-depth discussions on regulatory innovations for virtual assets and industry development opportunities. The fervent hosting of this grand event resonated with the policy momentum following the official implementation of the "Stablecoin Regulation," accelerating Hong Kong's emergence as a core hub in the global Web3 space, attracting numerous crypto enterprises and talents to establish their presence.

I. Breakthrough Progress in Regulatory Policies

On August 1, 2025, Hong Kong's "Stablecoin Regulation" officially came into effect, establishing a clear compliance framework for industry development. The core requirements of the regulation are explicit: issuers must maintain a 1:1 fiat currency reserve (cash or short-term government bonds), implement KYC real-name systems, possess the capability to complete redemptions within one day, conduct independent audits, and establish a physical operational entity in Hong Kong.

For existing issuers, the regulation sets a transition period: they must complete rectifications within six months, and those who fail to meet the standards must cease operations within four months. Violators could face severe penalties, including fines of up to HKD 10 million and license revocation. In a recent public event, the Vice President of the Monetary Authority, Chen Weimin, revealed that the first stablecoin license is expected to be issued in the first quarter of 2026, initially granted to 2 to 3 institutions that meet high compliance standards (the final number will depend on official approval results). This news sparked enthusiastic discussions at the regulatory subforum of the Bitcoin Asia conference, with attendees generally believing that a clear licensing timeline will further boost market confidence.

II. Continuous Deepening of Sandbox Testing and Pilot Projects

With the advancement of regulatory policies, Hong Kong's sandbox testing and pilot projects are also steadily deepening. Several institutions, including JD Coin Chain Technology, Yuan Coin Technology, Standard Chartered Bank, and Hong Kong Telecom, are participating with different focuses. JD Coin Chain Technology is concentrating on the development of HKD stablecoins, planning to deploy on an Ethereum-compatible chain to support B2B cross-border settlements between Southeast Asia and mainland China; Yuan Coin Technology focuses on optimizing cross-border payment scenarios; Standard Chartered Bank is responsible for compliance custody; while Hong Kong Telecom is actively exploring stablecoin applications in retail scenarios.

In terms of the technical path for sandbox testing, JD Coin Chain Technology's solution is particularly noteworthy, as it plans to achieve stablecoin deployment through an Ethereum-compatible chain, aiming to cover the vast trade network between Southeast Asia and mainland China, a technical route that has gained considerable recognition in the industry.

III. Clear Policy Attitude, Balancing Development and Risk

Financial Secretary Paul Chan emphasized that stablecoins should be positioned as "financial efficiency tools," primarily used to optimize transaction efficiency and reduce settlement costs, firmly preventing their use for speculative trading. The Monetary Authority's President, Yu Weimen, pointed out that the compliance thresholds for stablecoin issuers will be benchmarked against traditional banks, with reserve assets required to be held by licensed institutions to maximize the safety of user funds.

While the regulatory authorities are sending supportive signals, they also place a high priority on risk prevention. Legislative Council member Wu Jiezhuang specifically reminded retail investors at the Bitcoin Asia conference to be wary of the risks associated with "unlicensed stablecoins." He revealed that the Monetary Authority has established a dedicated reporting mechanism to crack down on false advertising related to stablecoins, effectively protecting the rights of ordinary investors.

IV. Large Enterprises, Listed Companies, and Traditional Financial Institutions Accelerating Diversification Strategies

Tech Giants Making Strong Moves

JD's JD Coin Chain Technology is actively preparing to issue the HKD stablecoin JCoin, initially aimed at serving the supply chain finance scenarios of JD's 3C and home appliance categories, with plans to collaborate with platforms like Lazada and Shopee to expand cross-border payment services.

Ant Group is entering the space through the Jovay public chain, which supports dual verification via TEE + ZK, achieving a TPS of 100,000, and has connected to 15 million new energy devices to assist in RWA issuance. Ant Group will explore the Hong Kong compliance market under the independent brand Jovay Labs, preparing to apply for stablecoin and virtual asset trading licenses.

Local Crypto Companies Accelerating Layouts

Local licensed crypto institutions in Hong Kong are also taking frequent actions. HashKey Group held a strategic cooperation signing ceremony with Wanxiang Blockchain and several industry partners at Central Trading Plaza in Hong Kong on August 28, focusing on the ecological construction of stablecoins and RWA. According to the cooperation plan, all parties will leverage the ecological advantages and technical capabilities of HashKey Chain to jointly promote the construction of an enterprise-level blockchain cross-chain interoperability system, helping traditional enterprises connect with the Web3 technology world and efficiently link with the global Web3 ecosystem.

OSL, as the first licensed digital asset exchange in Hong Kong, officially launched the "OSL Institutional Digital Asset Solution 2.0" in July 2025, tailored for financial institutions to provide compliant, secure, and efficient digital asset service systems. This solution includes four core modules: license upgrades, stablecoins, RWA, and tokenization, offering deep liquidity API access, public chain ecosystem support, multi-account management, and more, meeting the high-frequency trading needs of various clients, including brokerages, asset management institutions, and family offices. As of the end of June 2025, OSL's institutional business has covered over 500 licensed virtual asset institution clients in Hong Kong. Additionally, OSL has partnered with the decentralized finance protocol Ethena to provide USDe interest-bearing stablecoin-related products, further enriching its stablecoin business matrix.

Traditional Financial Institutions Accelerating Digital Transformation: Breakthroughs in Banking, Asset Management, and Brokerage

After the policy breakthrough, the transformation paths of traditional financial institutions are showing differentiated deepening. Standard Chartered Bank, in collaboration with Animoca Brands and Hong Kong Telecom, has jointly established the Anchorpoint joint venture and has formally submitted an application for an HKD stablecoin license to the Monetary Authority, planning to issue the stablecoin HKDX, focusing on the virtual asset trading in gaming and cross-border trade financing, leveraging traditional cross-border settlement advantages to build a new moat in the crypto era.

The asset management sector is also witnessing product innovation breakthroughs. Huaxia Fund has launched the first on-chain bond fund based on the Hong Kong government's green bonds, with an annualized yield of 4.2%, supporting subscriptions in USDC, becoming a key link between the traditional fixed income market and crypto capital.

The actions of brokerage firms are particularly noteworthy. Futu Securities, after obtaining the virtual asset trading license from the Hong Kong Securities and Futures Commission, will be the first to launch BTC and ETH trading services in the second half of 2024, and in May 2025, it upgraded to introduce cryptocurrency deposit functions, establishing a closed-loop funding system of "fiat - crypto - traditional assets." Its tiered service strategy is quite instructive for the industry: ordinary investors can participate in mainstream coin trading with low thresholds, while advanced features like USDT deposits are limited to professional investors, with the underlying technology supported by the licensed institution HashKey, strictly prohibiting transfers from exchange wallets to avoid compliance risks. The latest financial report shows that Futu's crypto asset scale grew by 43% quarter-on-quarter in the second quarter of 2025, with over 10% of its 1.2 million active users already participating in crypto trading, and the annual new liquidity is expected to exceed USD 1 billion.

The collective entry of leading brokerages is creating an industry wave. Institutions such as Guotai Junan International and Tianfeng International have completed securities license upgrades and are authorized to provide virtual asset trading and consulting services, while Huatai International and China Merchants Securities International are actively applying for relevant qualifications. The entry of these institutions not only brings incremental capital but also promotes the integration of crypto trading into the traditional financial account system, providing investors with innovative strategies for cross-market arbitrage and risk hedging.

Movements of Senior Crypto Figures Also Aim to Embrace Hong Kong?

The decisions of core industry figures are profoundly influencing the regulatory landscape of Hong Kong's Web3. BNB Treasury has appointed former Galaxy Digital executive David Namdar as CEO to strengthen institutional client services and compliance structure. Zhao Changpeng (CZ) plans to apply for a stablecoin license through a Hong Kong subsidiary and reference the MicroStrategy model to include BNB in the balance sheet of a listed company.

Ant Group's Chief Scientist Yan Ying is leading the development of a "device fingerprint on-chain" system, helping GCL-Poly Energy Holdings complete a USD 1.2 billion green asset token issuance. She pointed out that the development of RWA needs to first tackle the oracle problem and predicts that financial asset tokenization will dominate the RWA market in the next three years, while physical asset tokenization still requires breakthroughs in DePin technology.

Galaxy Digital founder Mike Novogratz is empowering the industry with deep political and business resources, with board members including former U.S. Treasury officials like Tyler Williams, who facilitated an 80,000 BTC dark pool block trade, avoiding significant market fluctuations. Mike Novogratz positions Galaxy Digital as "Goldman Sachs of the crypto world," assisting traditional institutions in compliant entry into the crypto market.

V. Compliance Accelerates Industry Restructuring, Hong Kong Government Guides Healthy Industry Development

Compliance requirements are driving the accelerated reshuffling of Hong Kong's Web3 industry. Octopus has halted stablecoin research and shifted to the digital HKD (e-HKD) project; small unlicensed trading platforms like JPEX have directly exited the Hong Kong market. Meanwhile, companies like Lianlian Digital and Ping An Group are entering the Hong Kong market through acquisitions of licensed institutions, focusing on RWA and cross-border payment businesses, continuously optimizing the industry landscape.

Licensed institutions like OSL are gaining more development opportunities due to their compliance advantages. As one of the first platforms to be issued a virtual asset trading license (VATP) by the Hong Kong Securities and Futures Commission, OSL meets strict requirements for fund custody, anti-money laundering, and KYC, becoming an important entry point for institutional funds into the crypto market. With the growth of stablecoin trading volume, OSL's fee income is expected to continue to rise, while its licensed custody qualifications also position it to meet the reserve custody needs of stablecoin issuers.

The next six months will be a critical development node for Hong Kong's Web3: in the fourth quarter of 2025, the Monetary Authority will announce the first batch of stablecoin license holders, with the Anchorpoint consortium, Bank of China Hong Kong, and Yuan Coin Technology being core candidates due to their leading positions (the final list will be subject to official announcement). The strategic cooperation between HashKey Group and Wanxiang Blockchain will also enter a substantial promotion phase after signing, with breakthroughs expected in cross-chain interoperability and industrial scenario integration.

On the technical front, if ZK proofs achieve large-scale application in RWA scenarios, real estate tokenization platforms may be the first to land in Hong Kong. Additionally, as more institutional clients flock in, institutional digital asset service solutions from platforms like OSL will continue to upgrade, and brokerage firms like Futu are expected to expand their crypto product lines into the staking and lending sectors, providing more robust infrastructure support for industry development.