Hong Kong plans to issue its first batch of stablecoin licenses next year as banking giants promote asset tokenization.

A. Market Perspective

1. Macroeconomic Liquidity

The liquidity of the currency has improved. The Federal Reserve has kept interest rates unchanged for five consecutive meetings, maintaining the target range for the federal funds rate at 4.25% to 4.50%. The Fed chair did not provide clear guidance on a rate cut in September, emphasizing that inflation risks still exist while pointing out that the job market is stable, which has suppressed market expectations for a rate cut this year. The US dollar strengthened, reaching a two-month high, and US stocks continued to rise to new highs. The performance of the cryptocurrency market, however, was weaker than that of US stocks.

II. Market Overview

Top 300 Market Cap Gainers:

This week, Bitcoin has been fluctuating at a high level, while altcoins have shown overall weakness, with most cryptocurrencies experiencing significant declines. The market is mainly focused on the Ethereum ecosystem.

|------|------|----------|-----| | Top 5 Gainers | Gain | Top 5 Losers | Loss | | LOKA | 300% | TKX | 60% | | ZORA | 60% | FARTCOIN | 30% | | ZBCN | 50% | M | 30% | | KTA | 40% | VIRTUAL | 20% | | REKT | 40% | GRASS | 20% |

• ZORA: Belongs to the socialfi project category and collaborates with applications on the Base chain. Supported by a certain foundation, it surged 10 times from the bottom.
• ENA: The well-established stablecoin USDE and the newly launched USDTB continue to be profitable, and a stock version of the holding company has been established for continuous buying. ENA collaborates with a lending protocol to release the stablecoin USDE for circulating loans.
• CFX: Domestic compliant public chain, stablecoin licenses expected to be issued in Hong Kong in September.

3. On-chain Data

Bitcoin liquidity is facing a severe test. An early whale sold over 80,000 Bitcoins through over-the-counter trading, with a trading volume approaching $10 billion. However, the market effectively absorbed this selling pressure, and currently, 97% of the circulating supply remains in a profitable state.

The supply of stablecoins continues to grow by 1%.

Institutional funds have continuously shown a net inflow trend. Ethereum has driven a surge in capital inflows, with the inflow amount from the beginning of this year already exceeding the total amount for the past 24 years.

The long-term trend indicator MVRV-ZScore, based on the total market cost, reflects the overall profitability status. A value greater than 6 indicates a top range, while a value less than 2 indicates a bottom range. When MVRV falls below the key level of 1, it indicates that holders are generally in a state of loss. Currently, this indicator is at 2.6, close to the middle range.

4. Futures Market

Futures funding rate: This week's rate is 0.01%, which is at a normal level. When the rate is between 0.05-0.1%, it indicates that there is a lot of long leverage, which may suggest a short-term market top; when the rate is between -0.1-0%, it indicates that there is a lot of short leverage, which may suggest a short-term market bottom.

Futures Open Interest: This week, Bitcoin open interest has started to decline.

Futures long-short ratio: 1.1, reflecting a neutral market sentiment. Retail sentiment is often a contrarian indicator; below 0.7 indicates panic, while above 2.0 indicates greed. It should be noted that the long-short ratio data can be quite volatile, weakening its reference significance.

5. Spot Market

This week, the price of Bitcoin has dropped, while the Ethereum to Bitcoin exchange rate remains strong, with a few small-cap coins related to stablecoin concepts leading the rise. The market has rotated from Bitcoin to Ethereum and then to altcoins, and it is expected that risks will gradually accumulate in the later stages.

B. Stablecoins and RWA

I. Stablecoin Sector

The Vice President of the Hong Kong Monetary Authority stated that the first stablecoin issuer license may be issued early next year. He emphasized that the threshold for obtaining the license is very high, and entering the "sandbox testing" does not mean approval can be granted. The Monetary Authority has an open attitude towards stablecoins that can be pegged to fiat currencies, and applicants must clearly specify the type of fiat currency during the application. Hong Kong will open the first batch of applications from August 1 to September 30, and the identities of all compliant stablecoin holders need to be verified, which is equivalent to a real-name system. This practice is stricter than the previously proposed "white list" system.

A blockchain department under a certain e-commerce giant has registered the trademarks "JCOIN" and "JOYCOIN", leading to speculation that these may be the names of its stablecoins. The registration details indicate that the related services include electronic fund transfers and cryptocurrency financial transactions provided through blockchain technology. The company is one of the participants in the Hong Kong Monetary Authority's stablecoin issuer sandbox program and collaborated with a certain bank last year to test a stablecoin-based corporate cross-border payment solution. Analysts believe that issuing stablecoins could significantly reduce cross-border payment costs, improve settlement speed, and help seize opportunities in the international supply chain and retail payment sectors.

A major payment giant has announced the launch of a new payment feature in the United States that allows small merchants to accept payments in over 100 different cryptocurrencies, including mainstream coins. This move significantly expands the company's service range in the cryptocurrency payment field and is expected to promote the adoption and application of crypto assets in everyday business scenarios. This open payment network could become a bridge connecting traditional finance with the crypto ecosystem, providing merchants with new revenue channels while enhancing the company's competitive advantage in financial technology transformation.

WLFI announced a strategic investment of $10 million in a synthetic USD stablecoin project. This project allows users to mint USDf by using stablecoins, mainstream cryptocurrencies, or tokenized U.S. Treasury bonds as collateral. Currently, the circulation of USDf has exceeded $1 billion. The reasons for its rapid growth include: supporting multiple asset types as collateral, providing staking yield mechanisms, and the expectation of rewards and airdrops.

2. RWA Sector

The U.S. White House Digital Assets Working Group has released an important policy report that presents several core recommendations, including: requiring regulators to clarify rules related to crypto assets; pushing Congress to pass related legislation; supporting blockchain tokenized securities, opposing the issuance of central bank digital currencies, and promoting the integration of crypto technology into traditional financial infrastructure.

The Hong Kong government has released the "2025 Digital Asset Policy Statement," confirming its commitment to building a global digital asset innovation center. Hong Kong has introduced a licensing system for virtual asset trading platforms and will implement stablecoin regulations. The government is advancing related bills and has established a regulatory sandbox mechanism to encourage innovation. Hong Kong is actively strengthening international cooperation to promote the establishment of digital asset regulatory standards and anti-money laundering mechanisms. At the same time, regulatory agencies are exploring the application of traditional asset tokenization and promoting the implementation of related products.

A major Japanese bank has acquired a high-rise office building in Osaka for approximately $680 million, planning to tokenize the asset using blockchain technology and issue digital securities. Institutional investors can participate through private REITs, while retail investors can purchase tokenized shares on specific platforms for fractional ownership. This initiative lowers the entry barrier for retail investors to participate in quality commercial real estate investments, enhancing asset liquidity and market transparency. This case marks a new stage in Japan's asset tokenization market, gradually moving towards a blend of institutional dominance and retail participation.