🚨China Warns as Hong Kong Pushes Stablecoin Plans🚨
Beijing Pushback:
Chinese firms in Hong Kong are rethinking plans to apply for stablecoin licenses as new policy signals from Beijing highlight risks of “fraud and risk transfer.” Caixin reports major banks, including ICBC, have quietly paused applications under Hong Kong’s new Stablecoin Ordinance, which took effect August 1.
Why the Hesitation?
While no formal ban exists, Chinese regulators remain wary of stablecoins enabling capital flight or scams. Earlier this year, authorities even halted research and seminars tied to stablecoins. That caution now appears to extend across the border, where mainland-linked entities are being nudged to pull back.
Hong Kong’s Drive:
In contrast, Hong Kong is pushing to become a global hub for regulated stablecoins. The Hong Kong Monetary Authority (HKMA) confirmed 77 firms have expressed interest in licensing, but only a select few approvals are expected, likely not before early 2026. Applicants reportedly include Standard Chartered, PetroChina, and Bank of China subsidiaries.
China’s Conflicted Stance:
Despite crackdowns, Beijing is exploring yuan-backed stablecoins for cross-border trade and Belt & Road initiatives, aiming to expand renminbi influence abroad. Yet the architecture of stablecoins — decentralized and borderless — collides with China’s need for tight financial surveillance.
The Bottom Line:
As Hong Kong courts global stablecoin issuers, mainland caution could limit Chinese participation — underscoring the region’s complex balance between innovation and control.