Stablecoin companies in Hong Kong experienced significant losses on Friday due to regulatory changes and a market downturn. Bright Smart Securities saw a nearly 20% drop, while Yunfeng Financial Group fell over 16%. Other firms like Guotai Junan International and OSL Group also faced declines. These companies, linked to stablecoin activities, are viewed by some experts as undergoing a necessary market correction. Allen Huang from the Hong Kong University of Science and Technology described it as a healthy adjustment, indicating that the stablecoin excitement has affected broader financial markets. The Hang Seng Index also fell over 1% amid a transition to new stablecoin regulations, which include stricter licensing requirements. Experts believe this sell-off reflects a rational market response to previous speculative behavior. The transition period may lead to fewer licenses being issued, favoring well-capitalized firms. While immediate growth in Hong Kong dollar-backed stablecoins is unlikely, the region's financial hub status may provide future advantages in cross-border payments and decentralized finance.
