Premier League giants Chelsea recently secured a major sponsorship deal with Web3 giant Circle, with the club's new season jerseys featuring the dollar stablecoin "USDC" and the word "Circle" on the front. However, the deal has sparked a series of financial regulatory concerns. Since Circle and USDC are not registered in Hong Kong, local fans are worried whether wearing the jersey in public could constitute illegal promotion. Can retailers sell this jersey? Can broadcasters air Chelsea matches?
The Hong Kong Monetary Authority (HKMA) responded by saying it would not comment on individual cases. However, the HKMA noted that the relevant regulations prohibit the "active marketing" or promotion of unauthorised stablecoin activities in Hong Kong. Whether a particular action constitutes active marketing to the public depends on the specific circumstances. Factors to consider include the language used in promotional materials, whether the promotion targets Hong Kong residents, whether a Hong Kong domain name is used, and whether there is a detailed marketing plan for the activity. Publishers and streamers who merely repost content created by others may be eligible for a special exemption, provided they meet the conditions set out in the relevant provisions and considering the relevant facts and circumstances.
Under Hong Kong's current Stablecoins Ordinance, unauthorised stablecoin activities or advertising of designated stablecoins is prohibited, with offenders liable to fines and imprisonment. Even advertisements originating outside Hong Kong are subject to this provision if they target the Hong Kong public.
It is understood that while Circle holds an electronic money issuer licence issued by the UK's Financial Conduct Authority (FCA), USDC is not issued or regulated under UK law. The FCA has previously warned Premier League clubs not to partner with unauthorised crypto and financial companies. Market speculation suggests Chelsea's sponsorship deal with Circle could be worth as much as £65 million.
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