The Hong Kong Stablecoins Ordinance will come into effect on August 1st, with licensing limited to a small number of individuals. Promoting unlicensed stablecoins may result in criminal charges Hong Kong will officially implement the "Stablecoins Ordinance" on August 1st, establishing a globally leading regulatory framework for fiat anchored stablecoins (FRS). The regulations require issuers to apply for licenses, covering AML, reserve management, information disclosure, etc. Unlicensed institutions promoting stablecoins to the public will be considered illegal or subject to fines and criminal liability. The Governor of the Hong Kong Monetary Authority, Yu Weiwen, issued a statement "pouring cold water": the market speculation is overheated, and a large number of applicants are stuck in the conceptual stage, lacking the ability to truly implement and control risks. The regulatory authorities have clearly stated that only "a few licenses" will be granted in the initial stage, and most application institutions may be rejected. It is reported that at present, in the sandbox test of three institutions, 50 or 60 enterprises have expressed their willingness to apply, covering central enterprises, banks, Internet companies, etc. The industry expects Hong Kong to adopt an "invitation based" application process, where only qualified applicants can submit their applications. In the future, a dual track system of "US dollar stablecoin linked to international+Hong Kong dollar stablecoin linked to mainland" may be formed to promote the internationalization experiment of the RMB. At the same time, multiple banks are competing for the role of custodian, with Deutsche Bank, Zhong'an, Standard Chartered, HSBC, and others already laying out related services. The custody business may become the core of the stablecoin business model, with an estimated annualized custody fee of 0.1% -0.5%. This move is seen as an important step for Hong Kong to promote the compliance of virtual assets, and also marks the entry of stablecoins into the "regulatory closure" stage globally. In the short term, the foam has cooled and approval has become stricter; In the long run, it may establish Hong Kong as a stablecoin hub in Asia. PANews will continue to monitor the implementation of regulations and the first batch of licensed institutions.