Hong Kong Secretary for Financial Services and the Treasury Thomas Hui said that Hong Kong has not yet adopted regulations on stablecoins such as Tether (USDT) or US Dollar Coin (USDC), which means that retail investors are not allowed to trade these assets. Xu Guanjie pointed out that stablecoins have faced severe volatility problems and even collapse in the past, and the reserve management of stablecoins has greatly affected the price stability of investors' rights to redeem legal currency.

Until Hong Kong officially regulates stablecoins, retail trading of stablecoins will not be allowed. In addition, Xu Guanjie mentioned that the closed local cryptocurrency exchange JPEX was involved in a serious fraud case, reflecting the need for higher regulation of the cryptocurrency market.

The JPEX case comes just weeks after Hong Kong regulators officially allowed retail investors to trade cryptocurrencies such as Bitcoin (BTC) in early August 2023. The Hong Kong Monetary Authority is expected to introduce regulatory guidance for the stablecoin market by the end of 2024.