China is banning stablecoin promotions to curb speculation and fraud, while Hong Kong aims to become a digital asset hub with its own regulatory framework.
Chinese financial regulators have instructed domestic brokerages and research institutions to halt all stablecoin promotion activities. According to Bloomberg, the directive — issued in late July and early August — prohibits publishing reports, hosting seminars, or conducting any promotional efforts that could boost investor interest. Authorities warn that U.S. dollar-pegged stablecoins could be exploited for speculation and illegal fundraising.
Stablecoins are blockchain-based assets typically pegged to the U.S. dollar and backed by cash and short-term Treasury bills. Beyond being used as a payment method, they are increasingly favored for cross-border money transfers. While China acknowledges their potential, it remains cautious. Last month, Shenzhen authorities warned the public about scams disguised as stablecoin investments.
Hong Kong, however, is taking a different route. Thanks to its “One Country, Two Systems” framework, the city is preparing a new regulatory regime for stablecoin issuers to position itself as a digital asset hub. Despite China’s crypto ban, over-the-counter (OTC) trading remains active, with Chainalysis reporting around $75 billion in OTC transactions during the first nine months of 2024.
