Core Points - The Hong Kong "Stablecoin Regulation" will take effect on August 1, establishing a comprehensive regulatory framework for fiat-backed stablecoins, marking a global first in this area [1][4] - The Hong Kong Monetary Authority (HKMA) will begin accepting applications for licenses in August, with a deadline for submission by September 30, and the first licenses expected to be issued in early 2026 [1][4] - The regulation aims to provide a legal basis for the development of the stablecoin market in Hong Kong, enhancing investor protection and fostering innovation in the stablecoin ecosystem [4][5] Group 1: Regulatory Framework - The "Stablecoin Regulation" is seen as a model for global stablecoin policy, introducing innovative "value anchoring regulation" principles [4] - The regulation is expected to accelerate the transformation of pilot experiences into actual products, significantly speeding up the establishment of the local stablecoin ecosystem [4][5] Group 2: Market Impact - The regulation is anticipated to reduce traditional financial institutions' concerns about participating in the stablecoin market, attracting more innovative stablecoin entities and exchanges [5] - The development of Hong Kong's stablecoin market is expected to enhance its position and influence in the global stablecoin landscape, providing a competitive advantage [5] Group 3: Cross-Border Payment and Currency Internationalization - The development of HKD stablecoins will enrich Hong Kong's cross-border payment ecosystem and facilitate the use of digital RMB in cross-border transactions [6] - The integration of digital RMB and HKD stablecoins is expected to lower cross-border payment costs and improve efficiency, reducing reliance on systems like SWIFT [6][8] - The internationalization of the RMB can be driven by expanding financial scenarios and technological innovation, enhancing its acceptance in global trade [6][8]

Core Viewpoint - The Hong Kong Monetary Authority (HKMA) is warning about the risks of over-speculation in stablecoins as the Stablecoin Regulation comes into effect on August 1, indicating a commitment to a balanced development of stablecoins [1][2]. Group 1: Regulatory Framework - The Stablecoin Regulation, passed on May 21, 2025, aims to create a risk-based regulatory environment that aligns with international standards, enhancing the regulatory framework for virtual asset activities while promoting financial innovation and sustainable development [1][2]. - The regulation follows the principle of "same activity, same risk, same regulation," requiring issuers of fiat-backed stablecoins to obtain licenses and adhere to strict asset management and redemption requirements [1][2]. Group 2: Market Dynamics - Stablecoins serve as a crucial link between traditional finance and decentralized finance (DeFi), enhancing market efficiency and accelerating the adoption of Web3.0 technologies, which could attract international capital and innovation to Hong Kong [3]. - As of now, the global cryptocurrency market is valued at approximately $3.35 trillion, with stablecoin supply around $250 billion and trading volume projected to exceed $20 trillion in 2024, indicating a significant market presence [3]. Group 3: Internationalization of Currency - The internationalization of currencies is a long-term process influenced by the overall strength of an economy and the development of financial markets, with Hong Kong positioned to leverage its financial market advantages to support the internationalization of other fiat currencies [4].

Group 1 - The core viewpoint is that the internationalization of the Renminbi (RMB) is an important development strategy for China, which should be approached with a pragmatic and cautious attitude rather than a pursuit of prestige [1] - Currency internationalization refers to the extent to which a sovereign currency is used as a medium of exchange or reserve asset in global economic activities, with a significant focus on financial transactions rather than just trade [1][4] - Financial transactions are the primary form of global trade, with the volume of foreign exchange trading equating to a year's worth of international trade every five trading days, and the total financial transaction volume being equivalent to global GDP every week [3][4] Group 2 - The internationalization of the RMB can enhance transaction convenience for businesses, eliminating the need to consider multiple currencies for imports and exports, and reducing exposure to foreign exchange risks [4][5] - A less obvious benefit is the potential reduction in borrowing costs, as international investors may be attracted to invest in China, leading to lower financing costs for companies issuing bonds [5][6] - The internationalization of the RMB could also lower personal loan rates, as increased foreign investment in Chinese banks would reduce the cost of attracting deposits [6][8] Group 3 - From a national perspective, currency internationalization can provide significant advantages, such as improving the ability to respond to financial crises and reducing the cost of issuing government bonds [8][10] - However, there are risks associated with currency internationalization, such as the "American disease," which refers to the potential for a country to relax fiscal discipline when its currency becomes an international currency, leading to increased fiscal deficits and inflation [10][11] - The RMB's internationalization must be approached cautiously to avoid negative impacts on the U.S. economy and to prevent the pitfalls associated with excessive currency issuance [13][14]