Stablecoin Concept Stocks Surge as Institutions Ramp Up Research Activity

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The recent legislative advancements for stablecoins in the U.S. and Hong Kong, combined with Circle's anticipated IPO as a major stablecoin issuer, have unexpectedly ignited China's A-share fintech sector.

Between May 28 and June 5, companies like Yuyuan Co., Ltd. achieved five consecutive limit-up sessions, while digital currency and blockchain concept stocks such as Cuiwei Co., Ltd., Zhongke Jinchai, and Hengbao Co., Ltd. frequently hit their price ceilings. Related Hong Kong-listed stocks also showed unusual activity.

Zhang Jingjing's team at CMB Macro noted that recent stablecoin regulatory bills in the U.S. and Hong Kong signify regulators' formal acceptance of stablecoin legalization and standardization, opening new investment opportunities. However, domestic investors should remain cautious about associated risks.

Behind the Stock Rally

Key legislative milestones include:

"These developments mark another milestone in cryptocurrency recognition following Bitcoin ETFs," noted Huatai Securities analysts Li Jian and Chen Yuxuan.

Market reactions were swift:

Sui Dong of Paipai Wealth Research observed that while the rally reflects stablecoins' long-term value in cross-border settlements and CBDC integration, most concept stocks remain at the payment technology application level without touching core issuance or reserve management functions. This creates a "concept-first, substance-later" imbalance where investors risk overvaluing short-term hype versus actual progress.

Market Drivers Beyond Legislation

The sector's heat stems from multiple factors:

  1. Circle's IPO: The USDC issuer debuted on NYSE (June 5), tightening integration between traditional finance and crypto
  2. Efficiency promise: Stablecoins could make global commerce more efficient by reducing payment costs 30-80% compared to traditional methods
  3. Market scale: With 232 stablecoins totaling $240B+ in market cap (8% of crypto market), per CoinMarketCap data

Key functional roles identified by analysts:

👉 Discover how stablecoins are transforming global finance

Institutional Interest Intensifies

Beyond retail speculation, institutions are actively researching stablecoin-related stocks. Zhongke Jinchai's investor records show participation from:

Global Implications and Limitations

Kaiyuan Securities analysts highlight that while dollar-pegged stablecoins dominate, their growth depends on:

  1. Application scenarios: Beyond regulatory frameworks, real-world utility drives adoption
  2. Ecosystem development: Requires coordinated efforts across payment networks and DeFi platforms

Notably, stablecoin demand could support short-term U.S. Treasuries but shows limited impact on long-term bonds, according to CITIC Securities' Xu Guanghong.

FAQ Section

Q: Are stablecoin stocks a safe investment?
A: Current valuations reflect hype more than substantive business integration. Investors should scrutinize companies' actual stablecoin-related revenue streams.

Q: How do U.S. and Hong Kong regulations differ?
A: The GENIUS Act emphasizes reserve requirements (80% in cash/short-term Treasuries), while Hong Kong's framework focuses on issuer licensing and redemption guarantees.

Q: What's the biggest risk for stablecoin adopters?
A: "Algorithmic stablecoins without proper collateral remain vulnerable to collapses like TerraUSD," warns Baoxiao Hui of Changli Asset Management.

👉 Learn about institutional approaches to crypto investments

Conclusion

The stablecoin sector presents a paradox: while legislation validates its potential, most related stocks remain speculative plays. Investors should prioritize companies with:

As the market matures, differentiation between true innovators and concept riders will become increasingly critical.