The Hong Kong financial market is witnessing a transformative shift as stablecoins take center stage. Recently, the Hang Seng-listed insurer ZhongAn Online saw its shares surge by as much as 25%, briefly surpassing HK$20 per share and recording a 66% gain over five trading days. This rally wasn’t isolated—A-shares in the digital currency sector also exploded upward. Companies like Langxin Group, Xiongdi Technology, Formosa Financial, and Tianyang Technology hit the 20% daily limit, while LakaLa and Feitian Technologies posted strong gains.
This momentum stems from a confluence of regulatory advancements and growing institutional confidence in stablecoins—digital currencies pegged to stable assets like the U.S. dollar. The catalyst? Hong Kong’s Legislative Council recently passed the Stablecoin Ordinance Bill in its third reading, setting the stage for a formal licensing regime for fiat-backed stablecoin issuers by the end of 2025. Meanwhile, global developments—including key legislative progress in the United States—are reinforcing the narrative that stablecoins are no longer speculative instruments but foundational tools for next-generation finance.
Regulatory Clarity Fuels Investor Confidence
Hong Kong’s move to regulate stablecoin issuers marks a pivotal moment in Asia’s digital finance evolution. The new framework, welcomed by the Hong Kong Special Administrative Region government, establishes a clear licensing system overseen by the Hong Kong Monetary Authority (HKMA). This structured approach strengthens financial stability while encouraging innovation within the virtual asset ecosystem.
By creating a compliant pathway for stablecoin issuance, Hong Kong aims to attract institutional players and fintech innovators seeking a well-regulated yet forward-thinking jurisdiction. A robust regulatory environment enhances investor trust and reduces systemic risks, making the region an attractive hub for digital financial services.
ZhongAn Bank, in which ZhongAn Online holds a 43.43% stake, stands at the forefront of this transformation. As Hong Kong’s first digital bank to offer reserve banking services to licensed stablecoin issuers—and Asia’s first to enable retail customers to trade cryptocurrencies—it is uniquely positioned to benefit from the new rules. Its deep integration with digital asset exchanges and stablecoin projects positions it as a key infrastructure provider in the emerging ecosystem.
Analysts at GuoJin Securities project high earnings elasticity for ZhongAn in 2025, especially given the low base in the first half of 2024 (just RMB 55 million in net profit). In contrast, Q1 2025 already delivered RMB 570 million in insurance profits, driven by improvements in underwriting and investment performance.
Real-World Assets Go Onchain: The RWA Revolution
Beyond payments, stablecoins are enabling a broader financial revolution through Real-World Asset tokenization (RWA)—the process of converting physical or financial assets into blockchain-based digital tokens. These tokenized assets can be fractionalized, traded globally, and settled instantly using stablecoins as the primary medium of exchange.
Langxin Group exemplifies this trend. In collaboration with Ant Digital Technologies, it completed mainland China’s first RWA transaction based on renewable energy infrastructure in Hong Kong. The deal involved tokenizing charging stations operated by NewCharge, Langxin’s EV platform, with each token representing a portion of future revenue rights from specific chargers.
Powered by AntChain, the blockchain infrastructure ensured data integrity, transparency, and immutability. This innovation significantly improves asset management efficiency and risk control while offering investors a verifiable green investment channel. With stablecoins serving as the settlement layer, such transactions become faster, cheaper, and more accessible across borders.
RWA applications extend far beyond EV charging stations—they include real estate, bonds, commodities, and private credit. As these markets go onchain, demand for fast, stable, and low-cost digital currencies will surge.
Global Momentum: U.S. Embraces Stablecoin Innovation
While Hong Kong advances its regulatory framework, the United States is making parallel strides. On May 28, U.S. Vice President J.D. Vance declared at the Bitcoin 2025 conference in Las Vegas that the current administration does not view stablecoins as a threat to the U.S. dollar. Instead, he called them a “force multiplier” for American economic strength.
This sentiment is reflected in legislative action. The Generating Engagement for National Innovation Using Stablecoins (GENIUS) Act passed a crucial procedural vote in the U.S. Senate with a 66–32 majority. While still requiring full Senate approval, House passage, and presidential signature, this marks significant bipartisan support for establishing a national framework for regulated stablecoin issuance.
The bill aims to empower qualified depository institutions to issue dollar-backed stablecoins while ensuring consumer protection and monetary sovereignty. If enacted, it could catalyze widespread adoption of digital dollars across payment systems, trade finance, and cross-border remittances.
Why Stablecoins Are Becoming Essential Infrastructure
Stablecoins are emerging as critical components of modern financial infrastructure due to three core advantages:
- Speed: Transactions settle in minutes rather than days.
- Cost Efficiency: Fees are typically under $10 regardless of transfer size (e.g., USDT transfers), compared to percentage-based charges in traditional banking.
- Global Accessibility: Available 24/7 without reliance on legacy correspondent banking networks.
According to Haitong International, stablecoin transactions offer significantly higher efficiency than traditional Western banking systems—particularly for cross-border payments where SWIFT-based transfers often take multiple days and incur high fees.
Moreover, with over $250 billion in circulating supply—mostly backed by short-term U.S. Treasuries—stablecoins have become major indirect holders of American debt. As noted by China Merchants Securities, formal recognition and regulation could further expand their scale, potentially increasing demand for Treasuries without destabilizing markets.
FAQs: Understanding the Stablecoin Surge
Q: What is a stablecoin?
A: A stablecoin is a type of cryptocurrency designed to maintain a stable value by being pegged to a reserve asset like the U.S. dollar or short-term government bonds. Examples include USDT and USDC.
Q: How does Hong Kong’s new stablecoin law work?
A: The Stablecoin Ordinance Bill introduces a licensing regime supervised by the HKMA. Only authorized institutions can issue fiat-collateralized stablecoins in Hong Kong, ensuring transparency, solvency, and anti-money laundering compliance.
Q: Why are stocks like ZhongAn rising on stablecoin news?
A: ZhongAn Bank plays a strategic role in the ecosystem as a reserve custodian and banking partner for crypto firms. Regulatory clarity increases its potential revenue streams from fees, custody services, and partnerships.
Q: Can stablecoins replace traditional banking?
A: Not entirely—but they are transforming specific functions like cross-border payments and programmable finance. Their speed and low cost make them ideal complements to existing systems.
Q: Are stablecoins safe?
A: Regulated stablecoins with transparent reserves (like those expected under Hong Kong’s framework) are considered low-risk. However, users should always verify issuer credibility and audit disclosures.
Q: What is RWA and why does it matter?
A: RWA (Real-World Asset tokenization) brings physical assets onto blockchains. It enables fractional ownership, global liquidity, and automated settlements—revolutionizing access to investments like real estate or infrastructure.
The Road Ahead: Building an Open Financial Future
The rise of stablecoins reflects a broader shift toward open, interoperable financial systems. With Hong Kong establishing itself as Asia’s digital asset gateway and the U.S. advancing national legislation, institutional adoption is accelerating.
Open-source initiatives like Safeheron’s recent global technology launch highlight another critical trend: transparency through code. By open-sourcing cryptographic tools for secure key management and payment routing, developers are building trustless infrastructure that supports scalable and resilient financial services.
As these technologies converge—regulated stablecoins, RWA platforms, decentralized identity, and smart contracts—the foundation for a more inclusive, efficient global economy takes shape.
Core Keywords:
- Stablecoin
- Hong Kong regulation
- RWA (Real-World Assets)
- Digital currency
- Blockchain technology
- Cross-border payments
- GENIUS Act
- Tokenization