Hong Kong’s central bank and securities regulator issued a joint warning against speculative trading driven by stablecoin licensing announcements and social media posts.
The Hong Kong Monetary Authority and Securities and Futures Commission said they observed market movements linked to corporate announcements, news reports, and speculation about plans to apply for stablecoin issuer licenses or engage in related activities in Hong Kong.
Some claims referenced recent communications with Hong Kong financial regulatory authorities, the regulators said in a statement.
The HKMA maintains a high threshold for assessing stablecoin issuer license applications. The authority emphasized that expressions of interest, applications, or communications with interested parties represent only part of the licensing process.
License approval depends on meeting all licensing criteria.
The regulators warned that market volatility driven by speculation exposes investors to unnecessary risks and can lead to irrational investment decisions.
They urged the public to exercise caution, conduct thorough research, and avoid making decisions based solely on market sentiment or price momentum.
Market participants should communicate responsibly and avoid statements that could mislead investors or create unrealistic expectations, the regulators said.
The SFC’s market surveillance team will monitor trading activities closely and take action against manipulative or deceptive practices that compromise market integrity, the commission said.
“The HKMA adopts a rigorous and prudent approach in assessing applications for stablecoin issuer license,” said Eddie Yue, HKMA Chief Executive. He added:
The approval thresholds set are high, and only a handful of licenses will be granted initially. We have been in preliminary communication with dozens of parties regarding stablecoin licensing as part of our market engagement.
Yue said such communication or related applications do not indicate approval or endorsement of any entity’s prospects.
Julia Leung, SFC Chief Executive Officer, said recent share price movements associated with stablecoin concepts highlight risks investors face and potential financial losses from relevant investments.
“In addition to conducting thorough research themselves, they should always be mindful of the misleading prospects of gains from short-term price volatility and be wary of unsubstantiated claims, particularly those appearing on social media,” Leung said.
The SFC will continue monitoring market activities closely and will take action to maintain market integrity and protect investors from risks, she added.
Hong Kong introduced stablecoin regulations as part of efforts to position itself as a digital asset hub while maintaining financial stability and investor protection standards.