A week after the implementation of the stablecoin regulation, the size of Hong Kong's over-the-counter market fell by 33%.

This article aims to provide a chain-based perspective for regulatory authorities by disclosing the TRC20-USDT outflow data of Hong Kong over-the-counter (HKVAOTC) service providers' addresses in the past 70 days.

Author:Bitrace

The Hong Kong Stablecoin Regulation (hereinafter referred to as the Regulation) officially took effect on August 1, 2025, establishing strict rules for the issuance and operation of stablecoins, explicitly prohibiting the offering, promotion, and sale of stablecoins without a license, with no transition period provided.

As institutions primarily engaged in stablecoin and fiat currency exchange, local cryptocurrency exchange shops in Hong Kong were the first to be affected. After the regulation came into effect, many over-the-counter service providers announced the suspension of stablecoin-related businesses while waiting to apply for licenses.

This article aims to provide a chain-based perspective for regulatory authorities by disclosing the TRC20-USDT outflow data of Hong Kong over-the-counter (HKVAOTC) service providers' addresses in the past 70 days.

Data Description

Bitrace has long been monitoring the business address traffic of VAOTC entities located in Hong Kong or primarily serving Hong Kong customers, which are divided into store-type service providers mainly serving offline or real-name customers, and non-store-type service providers mainly serving online or anonymous customers.

This investigation will disclose the TRC20-USDT transfer-out data of all service providers during two time periods: from June 1, 2025, to July 31, 2025, and from August 1, 2025, to August 8, 2025, Beijing time.

All data has been filtered to exclude non-operational transit activities between business addresses.

Stablecoin Trading Volume in OTC Market Decreased by 32.94%

From June 1 to July 31, all business addresses transferred out 3.17B USDT, with a daily average of 52.04M USDT; from August 1 to August 8, all business addresses transferred out 279M USDT, with a daily average of 34.90M USDT.

Compared to before the regulation took effect, the overall stablecoin exchange market scale decreased by 32.94% after August 1, indicating the profound impact of the regulation on the local crypto industry.

Store-Type Service Providers Showed Larger Reduction

Traffic statistics were conducted separately for store-type and non-store-type service provider business addresses.

After the regulation took effect, the daily average USDT transfer-out scale of store-type service provider business addresses decreased by 43.20% (9.47M -> 5.38M), while non-store-type service provider business addresses decreased by 30.65% (42.57M -> 29.52M).

Store-type service providers were significantly more affected, indicating a trend of some businesses moving underground in a short time after the regulation took effect.

In Conclusion

The introduction of the Stablecoin Regulation marks an important progress in the compliance of Hong Kong's crypto industry, producing a significant impact on the local over-the-counter service industry in the short term. Among related practitioners, some chose to follow regulations and apply for licenses, while others turned to underground operations, showing diversified choices.

Bitrace, as a leading regulatory technology enterprise, will continue to monitor and timely disclose data on the local cryptocurrency over-the-counter service industry.

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