Hong Kong Monetary Authority Chief Executive Eddie Yue: More efforts are needed to cool down stable coins.

On July 23, the Chief Executive of the Hong Kong Monetary Authority, Eddie Yue, wrote again about stablecoins. Yue mentioned that in the past month, the discussion and cooling intensity of stablecoins in the market and society still need to be strengthened, and discussed how to implement the "Stablecoin Regulation" in a prudent and sustainable manner. Yue stated that it is necessary to guard against excessive speculation in the market and public opinion about stablecoins. Recently, there have been some phenomena worth noting. Firstly, there is excessive conceptualization. Yue revealed that, based on the experience in Hong Kong, dozens of institutions have actively contacted the HKMA team, with some clearly expressing their intention to apply for a stablecoin license, while others are in the exploratory stage. However, many are still in the conceptual stage, proposing visions such as improving cross-border payment efficiency, supporting the development of Web3.0, and enhancing the efficiency of the forex market, but lacking practical application scenarios, specific feasible plans, let alone the awareness and ability to control risks. Some institutions that can provide application scenarios lack the technology to issue stablecoins and the experience and ability to control various financial risks. Yue suggested that there can be multiple modes of participation in stablecoins. For these institutions, a more practical approach seems to be to cooperate with other stablecoin issuing institutions to provide application scenarios rather than pursue being the issuer. Another issue worth noting is the trend of bubbles. Yue stated that with the recent hype around stablecoin concepts, the market has seen overly enthusiastic emotions. Some listed companies, regardless of whether their core business is related to stablecoins or digital assets, as long as they claim to be interested in developing stablecoin businesses, their stock prices have risen, trading volumes have increased significantly, and their brand awareness has also greatly increased. Yue reiterated that the HKMA had previously stated that in the initial stage, only a few stablecoin licenses would be issued and advised investors to remain calm and think independently when digesting the so-called "good news" in the market.