JUST IN: 🇨🇳 China plans to allow the launch of its first crypto stablecoin, Financial Times reports.
China Moves to Allow Stablecoin Launches as Hong Kong Advances Regulatory Framework
China is preparing to allow the launch of its first stablecoins as part of a broader strategy to internationalize the renminbi and challenge the dominance of the US dollar in global finance. However, concerns over capital flight and financial stability are slowing the pace of development.
Hong Kong, which operates under a separate regulatory framework, has emerged as the testing ground for stablecoin-related activity. While cryptocurrency remains banned on the mainland, Hong Kong recently enacted legislation permitting licensed entities to issue stablecoins backed by fiat currencies.
The Hong Kong Monetary Authority (HKMA), the territory's de facto central bank, has announced that only a limited number of licences will be granted starting in 2026. The regulator is focused on risk mitigation, particularly regarding money laundering and speculative trading. During a press conference, HKMA officials emphasized their concern over market "exuberance" and stated that initial stablecoin projects will be business-to-business in nature.
China's central bank governor, Pan Gongsheng, said in June that stablecoins have "fundamentally reshaped the traditional payment landscape." In recent months, Chinese financial regulators have held consultations with industry experts to discuss potential frameworks for integrating stablecoins into the domestic financial system.
Participants in these discussions indicated that any stablecoin project must align with China's national conditions and maintain compatibility with the country’s capital controls. Officials have also expressed concerns that stablecoin adoption could accelerate capital outflows.
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