Author: Liu Lanxiang, Fortune
Image Source: Visual China
The global stablecoin landscape is undergoing profound reshaping. The passage of the U.S. (Stablecoin Act) has accelerated the dollar-dominated tokenization process, while Singapore's adjustments to the crypto ecosystem have indirectly created development windows for Hong Kong. At the same time, the active pace of asset tokenization in Middle Eastern countries like the UAE also poses new challenges to traditional financial centers. Against this backdrop, Hong Kong is establishing its position in the stablecoin field with its transparent and efficient regulatory framework and financial innovation capabilities, accelerating the construction of its virtual asset center status.
The Hong Kong (Stablecoin Regulations) came into effect on August 1. Three days before the bill took effect, the Hong Kong Monetary Authority published two (explanations) related to the stablecoin licensing system and application procedures, stating that institutions intending to apply for licenses could express their intentions to the Hong Kong Monetary Authority in August, and that institutions ultimately deciding to apply must submit applications and materials on or before September 30. Hong Kong Monetary Authority Vice President Chen Weimin revealed that the first phase of licenses will be issued in early 2026, with the initial number of licenses being single digits.
As stablecoins officially set sail, it is worth noting that Hong Kong Monetary Authority President Yu Weiman stated on July 23 that stablecoins, as emerging payment tools, have positive significance in entering the traditional financial system through regulation. However, it is necessary to prevent excessive speculation on stablecoins in the market and public opinion, and to implement the (Stablecoin Regulations) according to prudent and sustainable principles.
As the largest licensed virtual asset exchange in Hong Kong, HashKey Exchange's leader Zhu Haiyang strongly agrees, stating in a recent (Fortune) interview that 'the capital market should avoid excessive speculation on the concept of stablecoins.' His professional background also provides a unique cross-border perspective on observing this chess game. As a firsthand witness to the development of China's mobile internet and fintech, he joined Meituan Waimai in April 2015 as a founding team member of the delivery service; thereafter, he was responsible for platform leasing business at Beike Zhaofang and participated in key rectifications and fund channel management related to the central bank's payment and clearing system at Ant Group's licensed entity Alipay (China). After joining HashKey Group, he was appointed Chief Risk and Compliance Officer due to internal demands, accumulating a deep understanding of digital asset market regulation within two years, helping HashKey Exchange obtain key licenses issued by the Hong Kong Securities and Futures Commission, Dubai Virtual Assets Regulatory Authority, Central Bank of Ireland, and Bermuda Monetary Authority.
Zhu Haiyang's cross-border experience from front-line business to compliance leadership undoubtedly provides him with a dual sensitivity to market pain points and the necessity of compliance. In his view, innovation within the compliance framework is the sustainable competitive edge. At HashKey, he has successfully facilitated cooperation with traditional financial institutions such as Deutsche Bank, streamlining fiat currency deposit and withdrawal processes and promoting the world's first tokenization of a money market fund ETF. The Wanxiang Group, which provides strategic support for Hashkey, established the Wanxiang Blockchain Laboratory in 2015. The founder of this laboratory, Xiao Feng, is also the chairman and CEO of HashKey Group, and he invested in Ethereum early on—this layout has clearly laid the foundation for the unique role Hashkey can play in the Hong Kong stablecoin ecosystem today.
Zhu Haiyang has observed that over the past year, the use of stablecoins in cross-border payments has grown rapidly, especially in large commodity trade settlements. Exchanges are inherently the core trading scenes for stablecoins (referencing the strategic collaboration between Circle and Coinbase, where the former leads the technical issuance and compliance management of stablecoin USDC, while the latter achieves distribution expansion through its trading platform and user scale). HashKey plans to cooperate with most stablecoin issuing institutions to launch Hong Kong dollar stablecoins while exploring innovative scenarios such as secondary trading of tokenized securities.
From a more macro perspective, under specific geopolitical pressures, stablecoins have become an important alternative channel for cross-border payment settlement. Regarding their impact on different countries, Zhu Haiyang pointed out that in markets like Argentina and Nigeria, where local currencies are unstable and foreign exchange is scarce, stablecoins (especially USD stablecoins) may become a 'financial alternative' for the public, posing a challenge to traditional banking systems; in markets where local currencies are stable and payment systems are highly developed, their substitutive role is relatively limited. This highlights that stablecoins are not only technical tools but also involve complex international financial power balances. How to maintain stability and sustainability? Below is the edited transcript of the dialogue between (Fortune) and HashKey Exchange CEO Zhu Haiyang.
In the financial industry - only by having 'no original sin' can one go further.
(Fortune): Your career path spans internet platforms, fintech, and compliant digital asset exchanges, which may provide different perspectives on the digital asset market. HashKey is one of the first exchanges in Hong Kong to obtain a full license from the Securities and Futures Commission. Can you discuss how you differ from other local exchanges in relation to the topic of licensed institutions related to digital assets under the Hong Kong Securities and Futures Commission?
Zhu Haiyang: At the end of last year, Hong Kong began to accelerate the issuance of digital asset exchange licenses. Currently, there are 11 licensed exchanges, but in reality, only we and one other are truly scaling operations. Our biggest advantage lies in the scale effect of liquidity, which is similar to mobile internet companies. The stronger the liquidity scale effect, the better the customer trading experience. Currently, over 90% of the volume on the compliant order book for digital assets in Hong Kong belongs to us. Our over-the-counter trading volume has increased by over 400% compared to the same period last year, and we have deep cooperation with traditional leading brokers such as Guotai Junan International and several major Chinese-funded brokerage firms. However, our long-term advantage is compliance. In KYC (Know Your Client) and anti-money laundering risk control, we differ from traditional banks. For client funds and asset sources, we implement KYT (Know Your Transaction). When clients deposit funds, we check all historical coin chain addresses to determine whether they originate from sensitive or sanctioned countries.
We have always pursued being an 'honor student' in compliance, believing that we will gain more policy dividends in the future. After the central bank's mainland ban in 2017, many companies went offshore to build non-compliant exchanges, but our company did not, because we believe that in the financial industry, only by having 'no original sin' can one go further.
(Fortune): This may be closely related to the style of Hashkey Group's founder, Xiao Feng.
Zhu Haiyang: In fact, Wanxiang Blockchain's technology and industry layout has been early in the game. When Ethereum was not yet famous, Dr. Xiao Feng was an angel investor in Ethereum founder Vitalik Buterin. After the domestic regulatory environment changed, we quickly divided the entire business into two parts, retaining Wanxiang Blockchain in the mainland to focus on providing blockchain technology services to banking institutions, while migrating digital asset management and trading-related businesses to Hong Kong and Singapore, applying for relevant licenses locally to conduct and land these businesses compliantly.
HashKey Group has a very rich ecological layout and business segments. First is the digital asset exchange, which I am responsible for. Hong Kong is our stronghold, and we are continuously pursuing globalization. We currently hold licenses and operate in major onshore financial centers such as Singapore, Japan, the UAE, and Europe; second is asset management, including our own VC fund, which has already invested in over 600 blockchain projects. In addition, we have expanded from the primary market to the secondary market, including spot ETFs and Top 20 index funds; third is the on-chain department and tokenization business, including on-chain node staking and on-chain solutions for financial institutions (for example, assisting fund companies in issuing tokenized products on-chain). To address financial institutions' security concerns, we launched our own public chain at the end of last year. This Ethereum-based Layer 2 chain has hosted assets worth nearly $200 million from several financial institutions, making it one of the largest compliant public chains in Asia. From trading and asset management to on-chain infrastructure services, we have achieved a closed loop in our ecological layout, which is not available in other digital exchanges.
(Fortune): How is your cooperation as a compliant exchange with traditional financial institutions? What frictions and breakthroughs have you encountered?
Zhu Haiyang: The fiat currency channel has gone through some processes, and part of the risk control of some banks is still conservative, encountering exchanges can easily lead to risk control 'carding'. We have established cooperation with Standard Chartered, ZhongAn, Deutsche Bank, and some Chinese-funded banks, and we hope that industry policies and bank-side risk control will progress in sync. Currently, if a customer faces issues with their bank card, we will consider switching to a more open bank. Many banks do not understand how strong our on-chain anti-money laundering technology is, as we can achieve full chain traceability, which is difficult for traditional banks. I believe that as the stablecoin legislation in the U.S. and Hong Kong comes into effect, more banks will change their mindset and gradually enter this market.
(Fortune): How has your exchange's customer growth been since last year? Are there any specific cases that surprised you?
Zhu Haiyang: Over the past year, we have doubled our individual customer numbers, and the number of institutional and corporate clients has also doubled. Since BlackRock began establishing a Bitcoin ETF in early last year, internet brokers and Hong Kong and Chinese brokers have gradually entered the market, driving market growth. In this round of market conditions, the new highs of Bitcoin and Ethereum are driven by institutions, which is quite different from the past when retail investors dominated participation. One case that surprised me the most was last July when a company in the new energy battery sector approached us. Initially, we thought they just wanted to invest in digital assets, but upon further understanding, we discovered that when they purchased bulk raw materials, some upstream suppliers required payment in stablecoins, with single transactions reaching several million dollars. As a compliant fiat-to-stablecoin exchange, we became their top choice.
We initially thought that digital assets were primarily for personal investment and financial speculation, but unexpectedly, traditional industries such as energy, gold, small commodities, and shipping are also spontaneously using stablecoins for large-scale cross-border payments, as stablecoins offer higher efficiency in cross-border clearing and settlement. Bank transfers take 1-2 days, sometimes requiring multiple intermediaries and facing strict regulations, whereas stablecoins can arrive in one minute, meeting enterprises' demands for cost, efficiency, and compliance. Compliant exchanges hold licenses and possess strict anti-money laundering and KYT traceability capabilities, which align well with these enterprises' needs. The spontaneous evolution and innovation of the industry are occurring faster and on a larger scale than we imagined. I mentioned at the Web3 conference in April this year that in light of the trade tariff war, countries around the world will further advance the application of stablecoins, and I believe explosive growth will occur in the short term.
The U.S. is pushing stablecoins to solidify dollar hegemony - China is accelerating its strategic layout.
(Fortune): Stablecoins highlight the value of compliant exchanges, and this may be an opportunity generated by the development of stablecoins in the U.S. What other opportunities do you see?
Zhu Haiyang: For compliant exchanges, stablecoins are a type of asset that non-compliant institutions cannot enter. Another type of asset is RWA (real-world asset securitization), especially the currently emerging tokenized securities, whose underlying essence is traditional financial instruments such as stocks, funds, or notes. Trading these securities also requires licenses. Since the underlying assets are the same, the risk recognition is also the same. From the perspective of underlying assets, unlicensed operations are inherently illegal, so the tokenization of assets creates a new opportunity for compliant development. The U.S. Securities and Exchange Commission (SEC) is accelerating the promotion of tokenization, and the new SEC chairman has been vocal in the past two months, stating that all U.S. stocks should be on-chain in the future. This is due to the natural advantages of blockchain in information disclosure, providing higher transparency. The U.S. is attempting to integrate the advantages of blockchain with traditional finance through this financial reform to strengthen its leadership position in the financial market. The trend of 'de-dollarization' that emerged after Trump's administration has prompted countries (including Japan, which recently reduced its purchases of U.S. Treasury bonds) to seek alternatives, while the U.S. hopes to solidify its dollar hegemony through the digitalization process. The U.S.'s push for stablecoins is also closely related to its national interests: all stablecoin issuing institutions are required to purchase short-term U.S. Treasury bonds as underlying reserves, which effectively absorbs a massive supply of U.S. debt (for example, Tether has become one of the world's major holders of U.S. debt). In June of this year, U.S. Treasury Secretary Yellen predicted that the scale of stablecoins would grow from the current approximately $250 billion to around $2 trillion, creating a massive buyer market for U.S. debt. Therefore, the U.S.'s push for this reform clearly has explicit political intentions and interests, and it is trying to lead global trends. This is undoubtedly an important window of opportunity that we need to seize.
(Fortune): Considering the increasing influence of stablecoins globally, can the internationalization of the renminbi leverage stablecoins for accelerated breakthroughs?
Zhu Haiyang: This question is actually critical. First, for the internationalization of the renminbi to break through more quickly, it indeed should leverage CIPS (Cross-Border Interbank Payment System). Stablecoins might serve as a very good auxiliary. Currently, CIPS has over 1,000 directly or indirectly participating banks globally, which can significantly enhance the efficiency of renminbi clearing and settlement. However, compared to SWIFT, the global terminals for CIPS are still limited, especially in regions like the Middle East, Africa, and Latin America, where there are few CIPS participants. Currently, the renminbi accounts for about 5% of global cross-border payments, leaving substantial room for improvement. China is a major foreign trade country with its unique industrial chain advantages, and more and more cross-border enterprises are aiming to reduce settlement costs and enhance the timeliness of receipts. Furthermore, the offshore renminbi pool is quite large, with deposits in Hong Kong alone amounting to around 1 trillion yuan, prepared for trade and asset circulation. If an offshore renminbi stablecoin is launched after the issuance of the Hong Kong dollar stablecoin, it could serve as a tool to increase terminal coverage and enhance on-chain efficiency, helping to boost the global payment share of the renminbi. In the long run, under certain geopolitical friction risks in China, this could also serve as a channel supplement and risk backup.
(Fortune): Hong Kong's speed in promoting stablecoins this time is quite fast. What do you think are Hong Kong's advantages in this regard?
Zhu Haiyang: The Hong Kong Securities and Futures Commission acted very quickly this time, and the policies are very open. The stablecoin legislation does not restrict the types of coins issued, allowing issuing institutions to issue Hong Kong dollars, U.S. dollars, euros, offshore renminbi, etc., depending on the richness of application scenarios. It is highly likely that the Hong Kong dollar stablecoin will be piloted first, targeting financial products and cross-border trade as two major scenarios. Moreover, Hong Kong itself is the largest transshipment trade center, providing a solid foundation for both commodity settlement and corporate overseas investment. Additionally, as an international financial center, Hong Kong has a natural connection with major global markets and institutions, enabling it to participate in global clearing and settlement as a window while facilitating the participation of major Chinese banks and leading enterprises in issuance, circulation, and custody, with policy support gradually loosening and guiding.
(Fortune): With Hong Kong launching stablecoins, what impact will these innovations have on the financial systems of other regions in Asia?
Zhu Haiyang: This actually depends on the robustness of each country's financial system, especially the stability of the local currency and the sophistication of the payment system. If a country's local currency is stable and mobile payments are well-developed (for example, low merchant acceptance fees), and the efficiency of interbank fund clearing and settlement is high, then for ordinary citizens at this stage, there is still a reliance on the banking account system, making it difficult for stablecoins to achieve an 'intergenerational shift' in daily payment experiences. Therefore, in the short term, the focus of change still lies in cross-border payment areas, including trade and labor remittances. In Asian markets, economies like Vietnam, the Philippines, Indonesia, Thailand, and Malaysia have developed their own banking and payment systems for some time, and the impact of stablecoins is more evident in cross-border payment scenarios. For example, remittances involving Filipino domestic workers between Hong Kong, the Middle East, and the Philippines are gradually transitioning from traditional Western Union remittances to stablecoins. For countries where the local currency is unstable, monetary policies are not very strong, and the payment system is relatively backward, the traditional financial system will be more affected by the substitutive role, as seen in regions like Africa and South America.
Different licenses should strengthen ecological collaboration - build a 'Serengeti Plain.'
(Fortune): Stablecoins are also a type of digital asset. If we compare the digital asset market prospects of Hong Kong, Singapore, and Middle Eastern countries, which do you think has greater potential?
Zhu Haiyang: In the past two years, Singapore was extremely friendly to digital assets, but due to anti-money laundering issues, Singapore has recently started expelling non-compliant institutions, which has partly affected the development of the existing local digital asset ecosystem, ironically providing Hong Kong with the opportunity to develop its position as a global digital asset center. However, the Middle East, especially Dubai, has now become a very important competitor to Hong Kong, as Dubai's regulation is even more flexible than Hong Kong's, and its pace of innovation is also significant. For example, in Hong Kong, stock tokenization is subject to specific regulations, so currently, it mainly focuses on fund and note tokenization products, while in Dubai, the UAE regulatory authorities are promoting stock on-chain processes. Theoretically, it will be possible to purchase on-chain issued global stock assets such as Apple and Tesla in onshore financial centers, and even unlisted company equity can be traded on-chain. The Middle East, with its historically weak financial infrastructure, dares to use blockchain technology to seize the new heights of international financial centers and is moving very aggressively. In contrast, Hong Kong has systemic advantages, and innovation is gradually accelerating. For example, derivative trading may also open up in the second half of the year. If we can further strengthen collaboration and coordination with other regulatory bodies in the region, we are quite confident in Hong Kong's development as a global digital asset center.
(Fortune): Last year, you were the Chief Risk and Compliance Officer of HashKey Group, and now you are in charge of the trading business group. How will you balance the speed of innovation with compliance costs?
Zhu Haiyang: Compliance is not merely a cost, but more of a commercial barrier. For example, in cold wallets, Hong Kong regulations require leading compliant exchanges to adopt HSM cold wallet technology. We have specifically built a corresponding wallet system internally and purchased the world's largest digital asset insurance coverage. Although this increases operational costs, it greatly enhances asset security. Just like the ByBit theft case resulting in a loss of $1.5 billion in assets, if cold wallets are isolated and complemented with insurance, the outcome would likely be very different. The 'complexity' of compliance is sometimes a rigid guarantee against risks. Another example is anti-money laundering; compliance processes drive us to invest heavily in KYC systems, on-chain checks, compliance risk control, and service access technologies, such as introducing full-chain tracing of wallet addresses to achieve on-chain flow from 'birth to endpoint' for every transaction.
In fact, our accuracy in anti-money laundering and the depth of traceability is even higher than that of traditional banking systems. The higher the compliance standards, the more we are forced to raise our operational, risk control, and research levels, which has earned us the trust of institutional clients. At the same time, in response to the short-term operational pressure brought by compliance requirements, we actively communicate closely with regulatory bodies such as the Hong Kong Securities and Futures Commission, frequently proposing innovative operational models such as optimizing insurance costs and liquidity costs. The regulatory authorities in Hong Kong and globally are also paying attention to the sustainability of businesses and will provide policy windows and flexibility for projects that are 'innovative yet safe.' Only on the basis of active communication and transparent compliance can innovation gain space and support. Compared to the model of non-compliant institutions that pursue 'short-term high growth and long-term high risk,' we continuously refine our products and services within the compliant scope, making it easier to grow into a business model with barriers that can achieve stable and sustainable profits.
(Fortune): From the perspective of licensing, what is the core thinking behind your global layout? Are you currently applying for any new licenses?
Zhu Haiyang: We place great importance on obtaining compliant digital asset licenses in mainstream onshore financial centers. We are the only company licensed in Hong Kong, Singapore, Tokyo, Dubai, and other financial centers, and are also upgrading our European license to the new MiCAR framework. Different market regulatory environments and trading structures vary significantly, and our business strategies for operating in different compliant markets are also quite different. For example, in the Middle East, Dubai has a geographical advantage, an open city, and fast inflows of talent and capital, making the digital asset ecosystem highly active. However, local trading does not primarily focus on cryptocurrency investment, but rather on cross-border trade payments.
For already licensed markets, our challenge is not to obtain additional licenses but to expand the scope of business under the existing licenses. For example, in Hong Kong, we want to expand into derivative trading. From this perspective, the focus of licenses is not on quantity but on quality. For non-licensed markets, we prefer to collaborate with local licensing institutions rather than going solo, as local collaboration can quickly integrate into local regulations and business resources, maximizing our respective advantages. For instance, in Southeast Asia, we recently reached a strategic cooperation agreement with Coins.ph, the largest digital asset trading platform in the Philippines. At the same time, we hope to promote mutual recognition of standards across regulatory jurisdictions, allowing the scale effects of different exchanges to be amplified. Different types of licenses should also strengthen ecological collaboration, as the relationship between stablecoin issuing institutions and exchanges is a strongly coupled cooperative relationship. Most activities related to stablecoin conversion and cashing occur on the exchange side. We are also communicating and collaborating with several stablecoin licensing institutions in Hong Kong to fully leverage our respective licensing advantages.
The scale of digital assets currently accounts for less than 1% of global financial assets, leaving ample room for growth. However, the financial regulatory system remains fragmented by country and region, with no single company able to achieve full coverage. This industry needs to build an ecological system similar to the 'Serengeti Plain,' where different jurisdictions and licensed entities strengthen cooperation and collaboration to jointly create industry prosperity.
(Fortune): It is reported that the talent gap in Hong Kong's digital asset field is as high as 100,000. What insights does HashKey have regarding team building? What advice would you give to those who hope to switch from traditional finance to the digital asset field?
Zhu Haiyang: The biggest challenge we face in team building is the integration of diverse cultures and backgrounds. Our current team composition is one-third from the crypto space, one-third from mobile internet, and one-third from traditional finance. Each group has its own cognitive inertia, and the challenge lies in how to bring them together and reach a consensus. We value colleagues who are 'open-minded and have strong learning abilities,' encouraging everyone to rethink what a compliant exchange is through first principles. For traditional finance talents looking to join the digital asset industry, maintaining an open mindset and actively learning new technologies and regulatory trends is crucial, as integrating and applying them can help find the right positioning and opportunities. Many underlying logics of risk assets and innovative applications are actually interconnected with traditional finance and mobile internet. Compliant digital assets have just opened the door to a new world, and Chinese companies and talents should seize this opportunity to run to the forefront of the world. (Fortune Chinese Network)
