The global Stablecoin Infrastructure will undergo unprecedented transformation as Hong Kong’s Stablecoin ordinance approaches its implementation on August 1st, and the US genius law catalyzes institutional adoption.
As a result, synchronized regulatory frameworks across both jurisdictions lead to exceptional market responses and strategic institutional positioning.
Market happiness responds to regulatory scrutiny
Traditional financial institutions in Hong Kong are located within the emerging digital asset infrastructure. Market dynamics reveal important speculations surrounding regulatory opportunities. More than 50 companies have expressed the benefit of licensing to turn state-owned companies in mainland China into the technology giant. However, most applicants do not have substantial use cases or technical capabilities.
Meanwhile, Eddie Yue, chief of Hong Kong’s monetary authority, warns against excessive market optimism. Initial license approval is highly selective and potentially single-digit numbering. Regulatory standards emphasize anti-money laundering compliance and robust technical implementation.
Strategic positioning beyond immediate profits
Nevertheless, stock market performance demonstrates the power of Stablecoin’s narrative. Companies announce license preparations have experienced dramatic price increases, some earning several times more. Thanks to the OSL Group, OKX Chain, and Winsway Enterprise Lead Sector.
Strategic considerations have been extended beyond the implementation of the Hong Kong dollar and towards the former control infrastructure. Chinese tech giants JD.com and Ant Group are actively lobbying Beijing for offshore former Stablecoin approvals, viewing dollar-dominated markets as a strategic threat. These debates reflect the growing urgency regarding ex-internationalization amid the growing adoption of USDT by Chinese exporters.
The licensing framework requires substantial capital commitment and continued cost of compliance. Companies need $25 million in paid-in capital, along with a comprehensive risk management system. Market observers predict ongoing speculation until license clarity emerges.
The US genius law catalyzes global momentum
The United States will provide additional catalysts through President Trump’s signature on July 18th Genius Act. This comprehensive Stablecoin law establishes chartering routes and monthly proof requirements for dual federal states. Market capitalization has skyrocketed $4 billion within a week, indicating institutional confidence in the clarity of regulations.
The act allows for broader institutional participation through the issuance of stubcoins, characterized by banks. Kinexys from Circle, Paxos and Jpmorgan hold major beneficiaries under the new framework. Beyond growing liquidity across the base and Solana network, it reflects strengthening compliance infrastructure.
Stablecoins already handles more annual payment volumes than Visa and MasterCard combined. With formal regulatory rails in place, traditional financial institutions can integrate tokenized cash solutions. The Ministry of Finance must publish the schema for the technical reserve within 180 days, and CFTC monitoring includes an automated compliance mechanism.
Sangho Hwang contributed.