Chinese Tech Giants Halt Hong Kong Stablecoin Plans Amid Beijing’s Regulatory Concerns

Executive Summary

Chinese technology firms Ant Group and JD.com have suspended their stablecoin development plans in Hong Kong. This decision follows interventions from the People’s Bank of China (PBoC) and the Cyberspace Administration of China (CAC), who voiced significant concerns regarding privately issued digital currencies and their potential impact on monetary sovereignty.

The Event in Detail

Ant Group and JD.com, key players in China's technology sector, have put on hold their initiatives to issue stablecoins in Hong Kong. These suspensions directly result from guidance provided by Beijing-based regulators, including the PBoC and the CAC. Sources indicate that the PBoC specifically discouraged participation in Hong Kong's pilot stablecoin program, citing risks associated with allowing private enterprises to create or manage currency-like assets. Regulators in Beijing view privately issued stablecoins as a potential challenge to the central bank's ultimate authority over currency, commonly referred to as the "right of coinage," and a possible threat to the digital yuan (e-CNY) project.

Former PBoC governor Zhou Xiaochuan echoed these sentiments at a financial forum in July, urging caution against the excessive use of stablecoins for asset speculation and questioning their utility. He called for a careful assessment of the true demand for tokenization as a technological foundation. Following these remarks, a more cautious regulatory stance reportedly emerged, effectively freezing private stablecoin projects originating from Chinese entities in Hong Kong.

Market Implications

This regulatory intervention introduces significant uncertainty for the development and adoption of stablecoins within Hong Kong and potentially across other Asian markets. Companies considering similar ventures are likely to re-evaluate their strategies due to increased regulatory risks. The move reinforces China's strict posture against private digital currencies, potentially steering stablecoin innovation towards more crypto-friendly jurisdictions globally. Despite these developments, JPMorgan Chase & Co. has noted that the worldwide acceptance of stablecoins could ultimately enhance the U.S. dollar's role in global finance, with estimates suggesting that approximately 99% of all stablecoins are backed by the U.S. dollar or dollar-denominated assets.

Expert Commentary

The central concern articulated by Beijing regulators revolves around monetary sovereignty.

"The real regulatory concern is, who has the ultimate right of coinage — the central bank or any private companies on the market?"

This perspective underscores a fundamental ideological difference between China's state-controlled financial system and the decentralized nature often associated with private digital assets. Former PBoC governor Zhou Xiaochuan emphasized the need to guard against systemic risks.

"We need to be vigilant against the risk of stablecoins being excessively used for asset speculation, as misdirection could trigger fraud and instability in the financial system."

Broader Context

This decision contrasts sharply with Hong Kong's proactive efforts to position itself as a leading Web3 and crypto-financial hub. The Hong Kong Monetary Authority (HKMA) began accepting applications for stablecoin issuers in August 2025, following the implementation of its comprehensive Stablecoins Ordinance (Cap. 656) on August 1, 2025. This ordinance established stringent regulatory requirements, including a minimum paid-up share capital of HK$25 million, HK$3 million in liquid capital, and robust reserve backing and AML/KYC protocols. The framework aims to ensure financial soundness, protect investors, and foster innovation within a secure environment, initially focusing on fiat-referenced stablecoins (FRS).

Despite Hong Kong's progressive regulatory framework, Beijing's influence extends to other digital asset activities. Chinese regulators have also informally advised several Chinese brokerage firms to suspend their real-world asset (RWA) tokenization operations in Hong Kong. This signals a broader tightening of oversight from Beijing, even as Hong Kong continues to push forward with its digital asset strategy, aiming to become a bridge between mainland China and international crypto markets. This divergence highlights the complex regulatory landscape for digital assets in the region, where Hong Kong's ambition for innovation must navigate Beijing's overarching concerns about financial stability and control.