Hong Kong's newly enacted stablecoin regulations have officially come into effect, having an immediate impact on the Crypto Assets market. It is understood that some offline OTC Trading stores have temporarily chosen to cease operations for compliance reasons. These merchants are concerned that their business may violate the new regulatory provisions, and thus they have taken a cautious approach.

However, the market response is not consistent. Some OTC Trading shops are still operating normally, believing that trading activities involving non-Hong Kong legal tender such as USDT are not within the regulatory scope of this regulation. This viewpoint stems from different interpretations of the content of the regulation and also reflects the uncertainty among market participants regarding the implementation details of the new rules.

It is worth noting that Hong Kong, as a common law jurisdiction, often requires case law to clarify the application of laws. Currently, there is no clear judicial precedent regarding whether stablecoin OTC Trading is illegal. This means that, until the courts make relevant rulings, some OTC businesses may continue to operate in a legal gray area.

This situation highlights the complexity of Crypto Assets regulation. On one hand, regulators want to protect investor interests and maintain financial stability through new regulations; on the other hand, the industry needs time to adapt to and interpret the new regulatory landscape. In the future, Hong Kong regulators may need to further clarify the applicability of the regulations to eliminate market uncertainty.

For crypto assets practitioners and investors, closely monitoring regulatory dynamics and timely adjusting business strategies and investment decisions is crucial. At the same time, this also presents new challenges for the development of financial technology in Hong Kong; how to strike a balance between protecting innovation and preventing risks will be a continuing challenge for decision-makers.