Hong Kong's Stablecoin Bill Boosts Crypto Trading Landscape

In a significant development for the Asian cryptocurrency market, Hong Kong's new stablecoin bill came into effect on Friday, heralding a potential transformation in crypto trading dynamics across the region. This legislative change allows financial companies to formally issue and manage virtual assets, drawing parallels to the U.S. GENIUS Act, which has already stirred excitement among stock analysts regarding an anticipated surge in trading activities.

Morgan Stanley analysts have indicated that the primary application for stablecoins in Hong Kong will focus on enhancing crypto trading, which could attract a wave of institutional investors. They identify Futu Holdings, a prominent online brokerage, as a favorable investment opportunity, rating the stock 'overweight' with a target price of $164.25. Conversely, Citi analysts have expressed their preference for Up Fintech, also known as Tiger Brokers, upgrading its rating from neutral to buy, as detailed in a report released on July 21, 2025.

Both Futu and Up Fintech made their U.S. market debut in 2019, prior to Robinhood's public offering. Originating in mainland China, these brokerages have shifted their focus towards Hong Kong and Singapore, partly due to the stringent capital controls and crypto bans imposed by Beijing. The crypto trading market in Hong Kong and Singapore is estimated to be worth approximately $640 billion, despite facing competition from unlicensed mainstream exchanges, according to Citi analysts. This positions both Up Fintech and Futu to potentially replicate the success witnessed by Robinhood, which has seen its crypto trading revenue significantly bolster its overall financial performance.

Citi's report highlights that Robinhood's crypto trading revenue not only doubled in the first quarter of 2025 compared to the previous year but also constituted a substantial portion of the company's total revenue, increasing from 3% in 2020 to 21% in 2024. As Robinhood prepares to announce its earnings on Wednesday, neither Futu nor Up Fintech have disclosed their upcoming earnings release dates.

Analysts at Citi have raised their price targets for both stocks, adjusting Up Fintech's target from $9.50 to $14 and Futu's from $113 to $176. Part of the optimism surrounding Up Fintech stems from potential business collaborations with Avenir Group, an investment firm associated with the founder of the prominent bitcoin trading exchange Huobi. Avenir recently acquired a 5.9% stake in Up Fintech, prompting analysts to speculate on future synergies that could elevate the broker's crypto business development.

Despite the promising outlook, analysts caution that the cryptocurrency landscape in Hong Kong differs markedly from that in the United States. Unlike the more conservative approach of Beijing towards cryptocurrency, Hong Kong has positioned itself as a testing ground for innovative financial practices, striving to maintain its global financial competitiveness. Both Morgan Stanley and Citi analysts believe that the initial focus of Hong Kong's stablecoin support will revolve around utilizing the Chinese yuan for international payments, although the region's broader ambitions are evident.

As the cryptocurrency sector continues to evolve in Hong Kong, the upcoming bitcoin conference, headlined by Eric Trump, son of former U.S. President Donald Trump, signals growing international interest in the region's crypto initiatives. The developments in Hong Kong could not only reshape local markets but also influence the global cryptocurrency landscape significantly, as firms like Futu and Up Fintech position themselves as key players in an increasingly competitive environment.