Chinese regulators have halted major tech firms’ plans to issue stablecoins in Hong Kong, signaling a firm intent to maintain control over digital yuan circulation.
Chinese authorities have reportedly ordered major tech firms such as Ant Group and JD.com to suspend their plans to launch stablecoins in Hong Kong. The directive came shortly after Hong Kong’s new stablecoin licensing regime took effect, with both companies having previously sought approval from the People’s Bank of China (PBoC) to issue yuan-pegged tokens.
Sources say the PBoC views the creation of any “currency” by private entities as risky. Regulators fear that privately issued stablecoins could undermine the role of China’s central bank digital currency (CBDC), the digital yuan, which has struggled to achieve widespread adoption since its rollout in 2020. Former PBoC Governor Zhou Xiaochuan recently reiterated these concerns, warning that “unbacked issuance” and “leverage effects” could threaten financial stability.
While Hong Kong’s Monetary Authority announced that 77 firms had expressed interest in obtaining stablecoin licenses, Beijing appears keen to slow not only stablecoin development but also broader tokenization initiatives. This move underscores the growing tension between Hong Kong’s role as a regulatory sandbox for crypto innovation and Beijing’s centralized approach to financial control.
