Morgan Stanley: Hong Kong stablecoin market size expected to be around $160 billion, with upside risk! Companies with licenses, compliance practices, and solid commercial plans will win in long-term competition

　Morgan Stanley published a report on August 4, estimating that the Hong Kong stablecoin market size would be around $160 billion (with an upward or downward range of $80 billion, depending on the tools used), with upside risks coming from expanded monetary aggregates, increased external demand for Hong Kong stablecoins, and escalating on-chain activities. The bank believes that companies with licenses, compliance practices, and solid commercial plans will win in long-term competition due to Hong Kong's relatively strict regulatory framework.

　The bank expects that stablecoins may increase demand for short-term high-quality liquid assets or compress short-term yields, promoting the development of local fixed-income markets. For the Hong Kong dollar, stablecoins can serve as an additional use case for the currency in both domestic and cross-border transactions. Currently, the Hong Kong dollar plays the most important role in international investors' transactions involving Hong Kong-listed stocks. If the Hong Kong dollar stablecoin can be widely used in cross-border settlement and other areas, it will increase the demand for the Hong Kong dollar among international users.