HKMA urges caution on stablecoin investments

The Hong Kong Monetary Authority (HKMA) has cautioned that stablecoins should not be viewed as investment assets, but rather as payment instruments. HKMA Chief Executive Eddie Yue noted that while global circulation of stablecoins has surged from USD20bn in 2020 to nearly USD250bn in 2025, their purpose is to facilitate transactions, not generate returns. Speaking at a Monday event and in an online article, Yue said new regulations taking effect in August will introduce strict licensing for stablecoin issuers. Only a few providers are expected to qualify, and sandbox participation will not guarantee approval.