2 days ago
- Business
- South China Morning Post
Hong Kong's stablecoin law opens floodgates for a boom in digital assets
Hong Kong has surged ahead of its global rivals
with its landmark stablecoin law , setting the stage for a boom in
digital assets and an injection of fresh liquidity into the market, according to brokers.
Advertisement
'We're seeing a significant trend in investments related to stablecoins on our platform, which highlights the growing importance of this sector,' said Daniel Tse, managing director of Futu Securities International, Hong Kong's largest online brokerage firm, in a written interview on Thursday.
Investors have become increasingly interested in stablecoins, which are digital tokens pegged to a reference asset like a fiat currency. This has been reflected by surging stock prices of stablecoin-related companies and a
sizzling US$1.1 billion initial public offering by the world's second-largest issuer, Circle Internet Group, which was completed in New York on Wednesday.
Hong Kong's new stablecoin law comes into effect on
August 1 and paves the way for issuance, positioning the city ahead of the US and mainland China, which has taken a cautious stance on cryptocurrencies. The city's financial and technology sectors are positioning themselves to use this in both digital assets and other traditional modes of finance.
'We are very optimistic about the increasing demand for a connection between Web2 and Web3, prompting us to build a one-stop platform,' said Tianhua Wu, founder and CEO of online brokerage Tiger Brokers, at a briefing on Tuesday. Web2 refers to the current iteration of the internet and Web3 refers to a next-generation internet decentralised and distributed through blockchain and similar technologies.
Advertisement
In the past month, Tiger Brokers expanded its deposit options to the world's largest stablecoin, Tether, as well as bitcoin, Wu said. The brokerage believes that supporting stablecoin deposits will enhance capital efficiency and flexibility in the market.
The broker said stablecoins would help reduce foreign exchange in cross-border transactions while improving user experience and fund mobility.
