Hong Kong regulators warn against hype-driven stablecoin market swings

Hong Kong’s fiscal regulators cautioned investors to debar making impulsive bets connected stablecoin-linked assets aft a spate of crisp terms swings tied to speculation, firm announcements, and unverified claims astir licensing plans successful the city.

In a associated statement, the Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC) said they had observed abrupt movements successful stock prices of companies linked to the stablecoin concept.

These shifts often followed quality reports, societal media posts, oregon statements suggesting that firms planned to use for a stablecoin issuer licence, prosecute successful related activities, oregon research specified initiatives locally. Some claims referenced discussions with the regulators themselves.

High barroom for stablecoin licensing

Hong Kong introduced its stablecoin licensing regime earlier this twelvemonth arsenic portion of a broader propulsion to found the metropolis arsenic a regulated hub for integer assets.

The HKMA said it applies a “rigorous and prudent” attack to reviewing applications, with stringent support criteria and an anticipation that lone a tiny fig volition beryllium granted successful the archetypal phase.

HKMA Chief Executive Eddie Yue said dozens of parties person engaged with the regulator astir licensing, but stressed that aboriginal connection and simply filing an exertion are not indicators of apt approval.

The process includes gathering capital, governance, hazard management, and operational requirements designed to guarantee the information and stableness of licensed stablecoins.

Investors cautioned

The SFC urged investors to stay clear-headed, behaviour thorough research, and debar decisions based solely connected short-term terms momentum oregon unsubstantiated online claims. It warned that volatility driven by hype could exposure retail traders to important losses.

SFC Chief Executive Julia Leung said the regulator volition continue to show trading closely done its dedicated marketplace surveillance team, which uses precocious systems to observe and analyse imaginable manipulation. She added that the bureau intends to instrumentality strict enforcement enactment against immoderate deceptive oregon misleading conduct.

The regulators besides reminded companies and marketplace participants to debar making nationalist statements that could mislead investors oregon make unrealistic expectations, noting that maintaining transparency and accuracy is captious to safeguarding marketplace integrity during the rollout of Hong Kong’s stablecoin framework.

The station Hong Kong regulators pass against hype-driven stablecoin marketplace swings appeared archetypal connected CryptoSlate.