Hong Kong Opens Stablecoin Licensing: Banks and Brokers Rush In

Monicah W

On August 1, Hong Kong’s Stablecoin Ordinance officially came into effect. The HKMA released detailed licensing guidelines covering capital, custody, KYC, reserves, and governance requirements.

Banks Lead the Race

Top banknote-issuing banks like BOCHK and Standard Chartered are expected to apply first. They hold regulatory and institutional advantages under Hong Kong’s currency system. Each stablecoin must maintain full fiat backing under strict bank custody.

HKMA will only issue a few licenses in the first batch. Applicants must submit by September 30 to be considered. Issuers not applying within three months face shutdown by November.

Many players are preparing applications now. State-owned enterprises, sandbox firms, and fintech giants are all participating. Application success will depend on real-world use cases and sustainability.

Target scenarios include asset tokenization, cross-border payments, and crypto trading. These use cases will determine which firms get approval.

Securities firms will initially focus on stablecoin trading, custody, and consulting services. They are also exploring tokenized asset portfolio services. So far, 44 brokers have upgraded their Type 1 licenses.

Hong Kong’s top brokers are racing to secure crypto licenses now. Failure to do so risks losing competitiveness in digital finance. Major Chinese brokers like Guotai Junan and Eastmoney have already upgraded.

Regulatory Warnings

HK regulators warn of hype and speculative risks ahead. Investors must evaluate asset backing and project viability carefully. Concept tokens without substance could still re-emerge despite new rules.

Some firms are exploring CNH-backed stablecoins for cross-border payments. For Instance, China Asset Management Company (Hong Kong) launched multiple tokenized funds this year. The Hua Xia RMB Digital Currency Fund became the first on-chain offshore RMB fund. Industry experts view this as a landmark event exploring offshore RMB stablecoin possibilities.

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PancakeSwap (CAKE) Leads Market Gains as Trading Volume Soars 88%

CAKE, the native token of decentralized exchange (DEX) PancakeSwap, is today’s top gainer, defying broader market trends.

The token has recorded a modest 3% gain over the past 24 hours, outperforming leading assets like Bitcoin (BTC) and Ethereum (ETH), which are both down by roughly 1% each during the same period. Technical indicators suggest that the rally could continue as it is backed by significant demand from market participants.

CAKE Climbs as Trading Volume Soars 88%

Amid the lull of the broader market over the past week, CAKE has managed to record gains. Currently trading at $2.48, the token has climbed by 9% since May 31.

This bullish trend continues today, evidenced by the trading volume surge accompanying CAKE’s price growth. The token’s trading volume is up 88% over the past day, pointing to heightened investor interest and growing demand for the DeFi asset.

When an asset’s trading volume rises alongside its price, it signals strong buying interest and confirms the strength of the upward price move. This combination suggests growing investor confidence in CAKE and hints that the upward trend may continue in the near term.

Moreover, readings from the altcoin’s BBTrend indicator support this bullish outlook. Observed on a one-day chart, the indicator is currently at 12.76, posting only green histogram bars since May 9. 

CAKE BBTrend.
CAKE BBTrend. Source: TradingView

The BBTrend measures the strength and direction of a trend based on the expansion and contraction of Bollinger Bands. When it returns red bars (negative values), the asset’s price consistently closes near the lower Bollinger Band, reflecting sustained selling pressure and hinting at the potential for further downside.

Conversely, as with CAKE, when BBTrend values are positive, it typically signals a strong uptrend. At 12.76, the momentum indicator confirms increasing bullish pressure among CAKE holders, suggesting that the current rally may have further room to run.

Bullish Indicators Emerge for CAKE, But Will $2.81 Hold?

CAKE’s rising Relative Strength Index (RSI) lends credence to this bullish outlook. As of this writing, the indicator is at 54.75 and in an upward trend. 

The RSI indicator measures an asset’s overbought and oversold market conditions. It ranges between 0 and 100. Values above 70 suggest that the asset is overbought and due for a price decline, while values under 30 indicate that the asset is oversold and may witness a rebound.

CAKE’s current RSI setup shows a steady rise in token accumulation, a pattern that could drive further price growth. 

If current sentiment and volume levels persist, CAKE could extend its gains to $2.81 in the near term.

CAKE Price Analysis.
CAKE Price Analysis. Source: TradingView

On the other hand, if demand falls, CAKE could fall below the support floor at $2.41 and drop toward $2.25.

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Analyst Says To Temper Bitcoin Rally Hopes As Stablecoin Minting Indicator Lags

Bitcoin (BTC) price is trading with a bullish bias, confronting the resistance at $94,000 with prospects for more gains. However, a renowned analyst says to temper Bitcoin rally hopes, citing a crucial indicator.

For a sustained rally, capital needs to enter the market consistently, as this provides the liquidity needed for further upside.

Lagging Stablecoin Indicator Threatens Bitcoin’s $100,000 Target

The Bitcoin price outlook was bullish on Wednesday during the early hours of the Asian session. Bullish technical formations, including the falling wedge pattern, hinted at further upside for the pioneer crypto.

As of this writing, Bitcoin was trading for $93,714, with up to 9% of a 20% potential rally still in the cards. The falling wedge pattern’s target objective is the 20% climb, determined by measuring the longest height of the wedge and superimposing it at the breakout point.

This bullish reversal is already in action after Bitcoin price flipped the critical resistance at $85,000 into support and converted the support zone into a bullish breaker.

Bitcoin (BTC) Price Performance
Bitcoin (BTC) Price Performance. Source: TradingView

Based on the daily chart above for the BTC/USDT trading pair, a daily candlestick close above $91,575 could set the tone for Bitcoin’s price to move further upside.

Increased buying pressure beyond the immediate resistance at $94,000 could see Bitcoin price eye $100,000 next. BTC could extend to the $102,239 target objective in a highly bullish case.

Technical indicators align with this outlook. The Relative Strength Index (RSI) is rising, recording higher highs, suggesting growing momentum. Its position below 70 indicates there was still more room upward before BTC was overbought and at risk of correction.

Similarly, the Awesome Oscillator (AO) histograms flashed green, indicating bullish control. Their position above the midline (in positive territory) adds credence to the bullish thesis.

However, 10x Research’s head of research, Markus Thielen, urges caution, citing the lagging stablecoin minting indicator.

“Given that our stablecoin minting indicator has yet to return to high-activity levels, we remain cautious about the sustainability of the current Bitcoin rally,” Thielen wrote in the latest 10X research.

The stablecoin minting indicator refers to the issuance or creation of new stablecoins, such as Tether (USDT) or USD Coin (USDC). Stablecoin minting often signals capital entering the crypto market, and it can have several implications for Bitcoin’s price.

Among them are increased liquidity and confidence in the market as investors anticipate profitable opportunities. Both of these are signs of potential bullish pressure.

According to the analyst, the absence of strong stablecoin inflows “raises questions about follow-through.” Bitcoin’s rally to the $100,000 psychological level remains under threat.

Bitcoin vs Stablecoin Minting Indicator
Bitcoin vs Stablecoin Minting Indicator. Source: 10X research

It is worth noting that stablecoins are less significant as a leading indicator for Bitcoin’s price. Analysts cite other factors like institutional inflows via ETFs (exchange-traded funds) or Strategy (MSTR) purchases.

Nevertheless, if profit-taking commences, a candlestick close below the midline of the bullish breaker at $86,562 could reverse the trend. This could plunge Bitcoin back into consolidation below the crucial level of $85,000.

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