The essence of stablecoins is the mapping of fiat currency on the blockchain, considered one of the earliest forms of real-world asset (RWA) landing.
Whether it is USDC, USDT, or USD1, their issuance logic is to pledge an equivalent amount of fiat currency in regulated accounts to ensure a 1:1 peg between on-chain tokens and fiat currency. These tokens achieve free movement on the blockchain, becoming a key link between traditional finance and the crypto world.
However, from the perspective of China's regulatory logic, it is unlikely that a similar fiat stablecoin will be introduced in the foreseeable future. The core reason lies in the bottom line of foreign exchange controls—if fiat stablecoins are opened, it may lead to a significant amount of funds being converted into stablecoins or overseas assets through on-chain channels, creating pressure for capital outflow. In this case, it would essentially allow domestic funds to flow into foreign markets, which obviously contradicts the current financial regulatory direction.
The cautiousness of the Hong Kong stablecoin legislation's regulatory details can be seen further:
KYC real-name system requirements are strict: user identity information must be archived for more than 5 years, and interaction with anonymous wallets and DeFi protocols is explicitly prohibited;
This design of 'real-name system + DeFi closure' has been criticized within the industry as 'Web2.5', deviating from the permissionless spirit of Web3;
Geographical restrictions are clear: services are prohibited in specific areas through IP/GPS tracking and VPN detection, objectively limiting global user access;
High entry barriers squeeze the survival space for small and medium projects, favoring traditional banks and financial giants, which may weaken the Hong Kong Web3 ecosystem's appeal for freedom.
Comparing international regulatory approaches reveals significant differences:
The U.S. has launched an 'innovation exemption' mechanism through the SEC's 'Project Crypto' to encourage modernization exploration in on-chain finance;
The EU (Markets in Crypto-Assets Regulation) (MiCA) provides anonymity exemptions for small transactions, allowing the existence of anonymous wallets;
Singapore's Digital Token Service Provider (DTSP) system adopts a layered sandbox model, actively welcoming DeFi projects to test the waters.
Clearly, the regulatory logic of Hong Kong stablecoins remains centered on 'risk prevention,' even prioritizing it over innovation. It is not difficult to determine that its settlement scenarios will be relatively narrow—users' private information must be transparent to the regulators, while the core user group of the crypto world naturally resists 'centralized regulation,' potentially limiting actual usage rates. After all, the underlying logic of decentralization inherently includes the pursuit of 'not needing to trust a third party.'
Looking at Bitcoin, among the fiat currency flowing into the chain, 60-70% ultimately flows into Bitcoin, which reflects the market's consensus on 'anti-inflation': fiat currency has the potential for unlimited over-issuance, while Bitcoin's total supply is fixed at 21 million, and with the halving mechanism of mining, it shows a long-term deflationary attribute. More critically, it has formed a strong consensus—offline exchange points and payment scenarios continue to expand globally, gradually becoming a 'digital asset anchor point' that transcends borders.
For centralized governments, such an asset that is detached from traditional currency issuance systems and possesses strong consensus will naturally attract attention. The credit foundation of traditional fiat currency relies on government endorsement and depends on national credit for circulation; while Bitcoin's credit comes from algorithms and consensus, not tied to any sovereign entity. This difference itself poses a potential challenge to the traditional currency system.
Whether Hong Kong stablecoins can gain market recognition ultimately depends on user voting with their feet. But at least from the current regulatory framework, there is obvious tension with the 'decentralized gene' of the crypto world—this may be the most noteworthy contradiction to observe in the future.
