The recent stablecoin regulatory moves in two regions are quite interesting and worth discussing.

On the mainland side, the actions are significant—the relevant authorities have directly classified stablecoin-related activities as illegal financial operations. This isn’t just talk; over 300 cases have already been investigated this year, with more than 4.6 billion yuan in funds intercepted. This pace clearly paves the way for the digital yuan, as the existing market needs to be cleaned up first.

Hong Kong, on the other hand, is taking a different approach. After the new regulations were implemented, Tether didn’t get a license, so ordinary retail investors can’t touch USDT anymore—only professional investors can participate. The regulatory mindset is clear: use high entry barriers to screen for institutions and guide stablecoins into real-world scenarios such as cross-border payments and tourism consumption. In simple terms, they want to build a “high-end compliance pilot zone.”

These two approaches are bringing about several changes:

USDT trading volume on the mainland will definitely plummet, and those funds will either enter the digital yuan system or look for other alternatives. Stablecoins like USDC, which have higher transparency and compliance, may benefit from this. Hong Kong’s strategy is to use strict regulation to attract major institutions and follow a boutique approach.

The current question is—since both core markets are restricting mainstream stablecoins, will the industry be reshuffled? And can Hong Kong’s “regulatory sandbox” model really become a new entry point for big capital?