$LUNA

The stablecoin regulatory storm is here, but it might not be what you think

Two pieces of news have been making waves in the crypto community lately: Mainland China’s 13 departments issued a joint statement cracking down on stablecoin-related activities, and Hong Kong’s new regulations require unlicensed stablecoins to exit the retail market. At first glance, it looks like heavy-handed regulation, but if you break it down, things are far from that simple.

Let’s start with the mainland. The policy directly labels stablecoins as “illegal financial activities,” controlling the entire chain from issuance to trading to payments. The numbers look scary—342 cases cracked and 4.6 billion yuan in funds intercepted in the first 10 months of this year. But you have to understand the context: this mainly targets the gray industry chain, and at the same time, clears the way for the digital yuan (cross-border payments have already surpassed 10 trillion yuan this year). To put it bluntly, they’re cracking down on illegal channels, not compliant users.

Hong Kong’s move is even more interesting. It’s not banning USDT, but setting a threshold: unlicensed USDT can only be played with by professional investors; retail investors are sidelined for now. The new rules require a paid-up capital of 25 million HKD + 100% reserves + real-name traceability. What’s the logic? Clearing out retail gray money to make room for institutional funds. Essentially, it’s a compliance-driven reshuffling, not a blanket ban.

The most surreal part is the market reaction: while USDT is under pressure, ETH is surging, BTC’s holding structure is optimizing, and funds are clearly flowing from stablecoins to mainstream coins. Does this look like panic selling? It’s more like rotation and bottom fishing.

To be honest: the real bearish signal has never been regulation itself, but not understanding the logic behind it. The stricter the policy, the sooner gray funds exit, and the more mature the conditions for mainstream funds to enter. This may not be a signal that the bull market is over, but rather a window for a reshuffle.

What do you think? Can BTC break 100,000? Let’s discuss in the comments.