The newly issued "Stablecoin Regulation" in Hong Kong officially came into effect on August 1, sparking widespread attention and discussion in the cryptocurrency sector. The introduction of this regulation has raised concerns among many about potential restrictions on the use of mainstream stablecoins like USDT and USDC in Hong Kong, which could impact OTC Trading and Decentralized Finance. However, according to interpretations from experienced compliance lawyers in Hong Kong, these concerns may be somewhat exaggerated.

In fact, the scope of the new regulations is much narrower than many people imagine. It mainly targets stablecoins issued locally in Hong Kong or stablecoins pegged to the Hong Kong dollar. This means that internationally mainstream stablecoins like USDT and USDC, as they are neither issued in Hong Kong nor pegged to the Hong Kong dollar, are not within the regulatory scope of this regulation. In other words, the legal status and use of these stablecoins in Hong Kong will not be substantively affected.

Concerns regarding the new regulations potentially affecting the OTC Trading market are also considered a misunderstanding. The regulations primarily focus on the issuance of stablecoins, rather than the trading aspect. This means that OTC Trading itself is not directly restricted. However, there remains some uncertainty about the specific impact on retail participation in stablecoin trading, which requires further observation of the specific implementation of the policy.

It is worth noting that the new regulations have indeed introduced some strict regulatory requirements, such as the provisions for identity verification (KYC) for holders. These measures aim to enhance the security and transparency of the financial system, but have also sparked some discussions about privacy protection.

Overall, Hong Kong's "stablecoin regulations" represent an important step taken by regulators in the Crypto Assets space. While it may pose challenges for certain local stablecoin projects, the impact on globally mainstream stablecoins does not seem to be as significant as initially expected. Over time, the actual effects of this policy and market reactions will gradually become evident, warranting continuous follow-up from industry insiders.