00863 Overview

Stablecoin Issuer Licenses: Hong Kong is expected to announce its first batch of stablecoin issuer licenses soon, with Standard Chartered, HSBC, and OSL GROUP shortlisted as potential candidates.

Market Reactions: OSL's stock price saw an increase, opening at HKD14.89 before settling at HKD13.94, reflecting a 7.15% rise amid significant trading volume.

Regulatory Environment: The shortlist for the licenses may change, as banks issuing notes are subject to strict regulations, indicating a likely dominance of banks in the final license list.

Additional Candidates: Initially, RD Technologies and digital payment provider LIANLIAN were also considered for the shortlist but may not be included in the final selection.

New Regulations on Virtual Currency: Eight Chinese government departments issued a notice to further prevent risks associated with virtual currency, while the China Securities Regulatory Commission introduced guidelines for the issuance of asset-backed securities tokens, defining Real World Assets (RWA) and establishing a regulatory framework for overseas tokenization of domestic assets.

Implications of the Regulation: The new regulations clarify the distinction between virtual currency and RWA, enforce compliance based on asset classification, and promote RWA financing for domestic entities abroad, adhering to the principle of "same business, same risk, same rules."

Hong Kong's Role as a Digital Asset Center: Hong Kong is expected to benefit significantly from the demand for quality asset outflows from China, with licensed Virtual Asset Trading Platforms (VATP) positioned as key players in the RWA sector, facilitating compliant listing, custody, and trading services.

Beneficiaries of Expanded Financing Channels: The expanded overseas RWA financing channels will benefit two tiers of entities: T1 includes financial infrastructure providers and brokers with cross-border experience, while T2 consists of Hong Kong licensed VATP brokerages and trading platforms.

New Regulations on Virtual Currency: Eight Chinese government departments issued a notice to prevent risks associated with virtual currency, while the China Securities Regulatory Commission introduced guidelines for the issuance of asset-backed securities tokens, defining Real World Assets (RWA) and establishing a regulatory framework for overseas tokenization of domestic assets.

Implications of the Regulation: The new regulations clarify the distinction between virtual currency and RWA, enforce compliance based on asset classification, and promote the overseas financing of RWAs by domestic entities, aligning them with traditional financing regulations.

Hong Kong's Role as a Digital Asset Center: Hong Kong is expected to benefit significantly from the demand for quality asset outflows from China, with licensed Virtual Asset Trading Platforms (VATP) anticipated to play a crucial role in the RWA sector's growth and normalization.

Beneficiaries of Expanded Financing Channels: The expanded overseas RWA financing channels are expected to benefit two tiers of institutions: T1 beneficiaries include financial service providers and brokers with cross-border experience, while T2 beneficiaries consist of Hong Kong licensed VATP brokerages and trading platforms.

Regulatory Notice Issued: The People's Bank of China and several other regulatory bodies issued a notice prohibiting the issuance of RMB-pegged stablecoins overseas without prior approval, aiming to mitigate risks associated with virtual currencies.

Market Response: Following the regulatory announcement, Hong Kong-listed stablecoin and cryptocurrency-related stocks experienced significant gains, with multiple companies reporting notable increases in their stock prices and trading volumes.

Trump's Fed Chairman Recommendation: President Donald Trump has recommended Kevin Warsh as the new Fed Chairman, with the appointment expected to take effect in mid-May, as the market closely monitors interest rate trends.

Bitcoin's Decline: Bitcoin has fallen below USD76,000, marking a 40% drop from its peak last year, with a recent 1% decrease bringing it to USD77,714, while Ethereum also experienced a 5.6% decline.

Monthly Decline for Bitcoin: January saw Bitcoin drop over 10%, resulting in its fourth consecutive monthly decline, the longest losing streak since 2018.

Subdued Hong Kong Crypto Stocks: Hong Kong's crypto-related stocks have shown weakness, with several companies experiencing significant declines and notable short selling activity.

Stock Performance: OSL GROUP's stock opened 4.56% lower, reaching a low of $17, and is currently down 5.39% with a trading volume of 105 million shares.

Share Placement Announcement: The company proposed a top-up share placement of approximately 100 million new shares at $14.9 each, which is a 17.2% discount to the previous closing price.

Use of Proceeds: The expected net proceeds of $1.55 billion will be allocated to various initiatives, including strategic acquisitions (30%), global business developments (35%), product and technology infrastructure (15%), and general working capital (20%).

Short Selling Activity: OSL GROUP experienced significant short selling, with a total of $16.49 million and a short selling ratio of 53.803%.