Hong Kong Warns Against ‘Stablecoins Craze’ As Two Arrested In $146.5M Laundering Bust

The Hong Kong Monetary Authority (HKMA) has warned against excessive hype around stablecoins and expressed concerns about stablecoin speculation in the market. The concerns have emerged just days before Hong Kong’s stablecoin ordinance, which will come into effect from 1 August 2025.

Calling the ‘stablecoin craze’ an over-conceptualization, HKMA CEO Eddie Yue said, “We need to guard against excessive market and public opinion speculation. Recently, there are some phenomena that deserve our attention.”

“Discussions around stablecoins tend to focus on their disruptive effects on traditional finance, especially the payment system. However, once it is time to move from the virtual to the real, from the conceptual and theoretical level to the application scenarios and specific arrangements, there will be a clear gap,” he stated in his blog post dated 23 January 2025.

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Hong Kong Customs Officers Arrest Two For Laundering $146.5 Million

According to a South China Morning Post published on 24 July 2025, Hong Kong custom officers arrested two men for smuggling cash, making suspicious transactions, apparently including with Tether stablecoin USDT.

“A Customs and Excise Department spokesman said that an investigation into the pair found they had smuggled cash out of the city,” the news report stated. “An insider said the suspects also made transactions using the stablecoin USDT and regular currency, with officers finding the source of funds to be questionable.”

Tether once again in the spotlight for money laundering. Will this be the new normal?

2 arrested in Hong Kong over laundering HK$1.15 billion in case involving stablecoin

Men accused of using transactions and cash-smuggling operations to launder funds #fintech #tech… pic.twitter.com/erDbplkyQ2

— Richard Turrin (@richardturrin) July 23, 2025

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Financial Secretary Confirms Stablecoin Licenses To Roll Out Starting August

To become world’s first regulated regime for stablecoins, Kong Kong said that it will implementing the stablecoin ordinance in August 2025. The move came after Hong Kong’s Legislative Council passage. It mandates entities or individuals issuing a fiat-referenced stablecoin (FRS) or Hong Kong Dollar-pegged tokens within the administration to obtain licenses from the HKMA.

Only licensed institutions can offer FRS, enabling retail investors to access stablecoins. The legislation states that these rules aim to protect the public and the investors. Additionally, to minimise fraudulent behaviour, the ordinance only allows ads for licensed FRS issuers.

In case you were wondering why stablecoin legislation was rushed through tonight…

Starting August 1, 2025, Hong Kong will launch an offshore Renminbi (RMB) stablecoin program, that aims to enhance RMB use in international trade and also establish Hong Kong as a digital… https://t.co/T5MX4pQlJ8 pic.twitter.com/DUew8iCUcf

— Subjective Views (@subjectiveviews) July 18, 2025