China has moved to block private stablecoin ambitions in Hong Kong, in what could be interpreted as an effort to reaffirm its state authority over monetary policy.
Two of China’s largest technology companies, Alibaba-backed Ant Group and JD.com, an e-commerce group, have been instructed to suspend their stablecoin plans in Hong Kong.
That follows guidance from the People’s Bank of China and the Cyberspace Administration of China, which warned against allowing private entities to issue currency-like assets, according to a Saturday report from the Financial Times.
Beijing’s move signals a recalibration of Hong Kong’s role in digital assets as it aligns with Beijing’s regulatory priorities. Instead of expanding on retail speculation, it shows a push toward disciplined, cross-border compliance where innovation is tolerated only within clearly defined state and policy boundaries.
There appears to be a tendency to “push a narrative that Hong Kong could serve as a loophole for mainland firms to circumvent PRC crypto restrictions, especially around stablecoins,” Joshua Chu, lawyer, lecturer, and co-chair of the Hong Kong Web3 Association, told Decrypt.
“This was never Beijing’s intention,” Chu said, noting how China’s crypto strategy “views speculative retail participation within the mainland as off-limits.”
What’s happening “is a natural refinement emphasizing responsible innovation and compliance rather than speculative hype,” he explained. “Hong Kong’s reputation depends on maintaining a clean, sophisticated framework that supports genuine market growth without undermining Beijing’s policies.”
Beijing’s intention for Hong Kong’s stablecoin regime is “designed to absorb foreign crypto capital, not serve as a conduit for domestic mainland transactions,” Chu said, adding that there is a misconception around private entities that neglects China’s pronouncement from 2021 regarding risks in speculative virtual currency transactions, which are still in effect.
The directive comes just months after both firms signaled interest in Hong Kong’s new stablecoin framework in June, even as mainland officials warned of persisting stablecoin scams.
Ant Group, whose payment arm previously partnered with Circle in July to support cross-border settlements using USDC, had planned to apply through its international division, while JD.com explored global stablecoin licenses in June to cut costs.
The PBoC reportedly told both firms not to proceed, warning that private stablecoins could blur the line between financial tech and sovereign monetary policy. Officials cited risks to capital supervision and potential overlap with the e-CNY, China’s central bank digital currency, which remains the cornerstone of Beijing’s long-term payments strategy.
An earlier analysis from Decrypt explored how China’s early stablecoin studies pointed to a tiered but fragmented strategy, where state-backed banks, licensed payment firms, and private fintech companies were each exploring separate digital-currency models instead of a unified framework, showing competing priorities within the system.
Late last month, Chinese regulators reportedly instructed several mainland-linked brokerages to similarly pause real-world asset tokenization efforts in Hong Kong, reflecting continued caution toward privately managed blockchain projects amid broader reviews of cross-border financial activity.
Decrypt reached out to Ant Group and JD.com for comment.
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