{ "id": 49439, "date": "2025-09-26T18:12:40", "date_gmt": "2025-09-26T11:12:40", "guid": { "rendered": "https:\/\/hbbgroup.net\/hong-kong-rules-limit-stablecoin-derivatives-trading-dbs-ceo\/" }, "modified": "2025-09-26T18:12:40", "modified_gmt": "2025-09-26T11:12:40", "slug": "hong-kong-rules-limit-stablecoin-derivatives-trading-dbs-ceo", "status": "publish", "type": "post", "link": "https:\/\/hbbgroup.net\/en_us\/hong-kong-rules-limit-stablecoin-derivatives-trading-dbs-ceo\/", "title": { "rendered": "Hong Kong rules limit stablecoin derivatives trading: DBS CEO" }, "content": { "rendered": "
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Hong Kong\u2019s stablecoin regulatory framework limits their use for derivatives trading on blockchain networks, according to Sebastian Paredes, CEO of DBS Hong Kong.<\/p>\n

According to a Friday report<\/a> by local news outlet The Standard, Paredes said that Hong Kong regulations<\/a> on stablecoin<\/a> Anti-Money Laundering (AML<\/a>) and Know Your Customer (KYC<\/a>) requirements will significantly restrict their use for onchain derivatives trading. He said the bank would monitor developments, but focus instead on building broader stablecoin capabilities in Hong Kong.<\/p>\n

His comments followed the rollout of Hong Kong\u2019s new stablecoin rules on Aug. 1. The rules immediately criminalized the promotion of unlicensed stablecoins<\/a> and established a public registry of authorized issuers<\/a>.<\/p>\n

Others have also criticized Hong Kong\u2019s stablecoin rules as overly harsh. When the framework was introduced, stablecoin companies operating in Hong Kong posted double-digit losses<\/a>, attributed to stricter rules than expected.<\/p>\n

DBS Bank in Hong Kong. Source: <\/em>Wikimedia<\/em><\/a><\/figcaption><\/figure>\n

Related: <\/strong><\/em>Animoca and Standard Chartered form stablecoin venture in Hong Kong<\/strong><\/em><\/a><\/p>\n

DBS is not new to crypto<\/h2>\n

The local DBS branch is a major bank in Hong Kong and holds nearly 492 billion Hong Kong dollars ($63.2 billion) as of last year, according to regulatory filings<\/a>. DBS is also the largest bank in Southeast Asia by assets, totaling<\/a> $842 billion Singapore dollars ($620 billion).<\/p>\n

The bank has long been involved with blockchain technology and the crypto industry. Earlier this month, DBS, Franklin Templeton and Ripple joined forces to launch tokenized trading and lending services<\/a> for institutional investors, leveraging the XRP Ledger.<\/p>\n

In late August, DBS also decided to expand its digital asset offerings with the launch of tokenized structured notes<\/a> on the Ethereum blockchain. The bank is no stranger to stablecoins, being responsible for managing the US dollar reserve of the Global Dollar<\/a> (USDG).<\/p>\n

In late 2024, DBS also introduced a new suite of blockchain-powered services<\/a> for its institutional clients and announced the offering of over-the-counter crypto options<\/a>. The bank also launched a solution last year that uses blockchain technology to streamline the disbursement of government grants<\/a>. <\/p>\n

Related: <\/strong><\/em>Asia\u2019s OSL Group raises $300M for stablecoin and global expansion<\/strong><\/em><\/a><\/p>\n

Hong Kong\u2019s stablecoin hiccups<\/h2>\n

Hong Kong was buzzing with stablecoin activity both before and after the local regulators adopted the new framework. When the rules, strict as they were, came into force, a Hong Kong Securities and Futures Commission (SFC) official warned that the new local stablecoin regulatory framework had increased the risk of fraud<\/a>.<\/p>\n

The statement was largely motivated by the speculative frenzy around companies that announced their interest in obtaining stablecoin licenses. Reports that HSBC and ICBC considered applying for stablecoin licenses<\/a> were followed by suggestions that the firms backed away under pressure from Chinese authorities.<\/p>\n

In early August, Chinese authorities instructed local firms to cease publishing research or holding seminars related to stablecoins<\/a>.<\/p>\n

This was followed by a since-removed report from major local financial news outlet Caixin that mainland Chinese firms operating in Hong Kong may be forced to withdraw<\/a> from cryptocurrency-related activities.<\/p>\n