"When traditional financial giants collectively enter the crypto space, the retail investors are in for a reckoning!"—this statement has become a true reflection of the Hong Kong digital asset market today.
In recent years, the crypto community has been shouting for 'compliance,' but what they got was not regulatory crackdowns but Hong Kong, along with 22 banks, 13 brokerages, and 5 major custodians, directly entering the crypto market! In the first half of the year, the trading volume soared to HKD 26.1 billion, an increase of 233% year-on-year, completely surpassing last year's total—this is not growth; it's clearly riding a rocket to the sky!
1. Banks are entering: The 'compliance add-on' for retail investors has arrived.
How difficult was it to buy crypto before?
Withdrawing from exchanges is risky due to potential scams; remembering cold wallet private keys can cause hair loss, and institutional funds can't even touch the thresholds.
What about now?
22 banks in Hong Kong are directly integrating digital assets into mobile apps—want to buy Bitcoin? Just a couple of clicks; want to invest in tokenized stocks? Buy and sell anytime, 24/7; worried about asset theft? Banks will manage your private keys for you, no need to remember them!
Case Study: HSBC recently launched 'Bitcoin Custody Services,' allowing retail investors to store 1 BTC in a bank wallet, providing not only on-chain record access but also the ability to stake and borrow HKD stablecoins—finally bringing the 'sense of security' of traditional finance into the crypto space.
My opinion?
Banks are not here to 'split the cake'; they are here to 'make the cake.' The compliant channels, risk control systems, and user trust they bring are exactly what the crypto space lacks the most.
2. The Stablecoin War: Is the Hong Kong Dollar trying to seize the throne of 'On-Chain Dollar'?
On August 1, the new regulations for Hong Kong stablecoins were implemented, with **Bank of China Hong Kong, Standard Chartered, Ant Group, and Deutsche Bank** all rushing in to grab licenses!
Why is it so crazy?
Once the Hong Kong Dollar stablecoin (such as HKDR, Bank of China stablecoin) goes live, it will accomplish two major tasks:
- Cross-border payments: Trade settlements in the Greater Bay Area are instant, with fees reduced to zero;
- Investment entry: To buy tokenized bonds in Hong Kong, one must use HKD stablecoins, with an annualized 5% return that is 10 times better than bank savings!
Case Study: A certain cross-border e-commerce previously settled using USDT, fearing frozen cards and volatility; now they have switched to HKD stablecoins, with money running on-chain and profits directly deposited into their accounts. Even more incredible, idle stablecoins deposited into DeFi platforms earn an annualized 3% interest—compliance in one hand, effortless earnings in the other; this operation is truly legendary!
My prediction?
By the end of 2025, the circulation of HKD stablecoins will exceed the share of USDT in Asia. It's not about the strength of the HKD, but the combination of 'compliance + returns' that is a dimensional blow to both institutions and retail investors.
3. Tokenized Bonds: Are they the 'new printing press' of the crypto world or a 'wealth trap'?
The Hong Kong Monetary Authority plans to issue HKD 5 billion in tokenized green bonds early next year, with HSBC and Morgan Stanley joining in to bring corporate bonds onto the blockchain.
How powerful is this thing?
- Retail investors can buy: 100 million in bonds can be split into 10,000 parts, each worth 10,000 HKD; what was once the 'cake' exclusive to institutions can now be shared with retail investors.
- T+0 trading: Traditional bonds take 3 days to sell, while tokenized ones can be done in 3 seconds, causing high-frequency traders to go wild;
- Smart contract dividends: Interest is automatically credited, no worries about defaults, and credit ratings are maximized.
Case Study: A large trader in the crypto space used to buy bonds by signing a bunch of contracts with brokers; now, with the HKEX Diamond platform, they can purchase with just a few clicks, and interest is displayed on-chain daily. Even more incredible, they use the bonds as collateral to borrow USDT for further trading—stable income in one hand, a chance for wealth in the other; this operation is nothing short of legendary!
My conclusion?
Tokenized bonds are not 'toys for the crypto world'; they are a rebirth of traditional finance on the blockchain. They will channel trillions of dollars from the bond market into the crypto market, causing 'risk assets' like Bitcoin and Ethereum to rise as well.
This wave of operations in Hong Kong essentially uses the 'compliance engine' of traditional finance to equip the crypto market with a 'trust accelerator.' The involvement of banks, the rise of stablecoins, and the explosion of tokenized bonds—these three events combined mean that the crypto market in 2025 will not be a choice between 'bull or bear,' but a survival battle of 'whoever gets on board first makes money.'
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