Fintech firms in Hong Kong capitalize on crypto Enthusiasm with equity raises

Fueled by the city’s move towards regulating stablecoins, Hong Kong-listed companies have collectively raised over $1.5 billion to fund their crypto-related ventures.

Hong Kong’s fintech sector is experiencing a surge in equity fundraising as companies seek to expand their presence in the cryptocurrency market. This influx of capital coincides with Hong Kong’s stablecoin bill taking effect, positioning the city as a key player in the regulated digital asset space.

Key highlights

• Significant Capital Raised: At least 10 Hong Kong-listed companies raised over $1.5 billion in July alone, demonstrating strong investor confidence in the sector.
• Focus on Stablecoins: The raised capital is earmarked for investments in stablecoins, digital assets, and blockchain-based payments.
• Regulatory Catalyst: The implementation of Hong Kong’s stablecoin bill has spurred investor interest, making fundraising for stablecoin development more attractive.
• Rapid Equity Offerings: The equity offerings have been quickly absorbed by investors, driven by optimism surrounding stablecoins and the future of digital finance.
• Regulator Caution: Despite the enthusiasm, Hong Kong’s central bank has cautioned against excessive exuberance, highlighting the need for careful consideration of the risks involved.

Industry insights

According to Anthony Pang at Baker McKenzie, there is a notable increase in fundraising activity linked to stablecoins and digital assets, indicating real and accelerating momentum in the space.

OSL raised $300 million to support global initiatives, including stablecoin development and a digital payment network. The equity raising was completed swiftly, attracting sovereign wealth funds and hedge funds. OSL Chief Financial Officer Ivan Wong noted the palpable investor zeal toward cryptocurrencies and stablecoins.

Market performance

An index tracking Hong Kong-listed stablecoin concept stocks has surged 65% this year, significantly outperforming the benchmark Hang Seng Index, underscoring the market’s positive sentiment toward the sector.

Broader market trends

The crypto enthusiasm has extended into private equity and startup markets. Venture capitalists are actively exploring projects in this area, reflecting the broader excitement around stablecoins.

raised HK$785 million to invest in Real World Assets (RWA), while Chinese AI giant SenseTime raised HK$2.5 billion and plans to explore blockchain, RWA, and stablecoins. Other companies, including ZA Online, have also tapped into the crypto trend.

Traditional finance interest

Traditional finance players, such as custodians and investment managers, are also seeking to participate, indicating continued interest in fintech applications.