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- China blocks Ant Group and JD.com from launching Hong Kong stablecoins.
- Regulators fear private digital currencies could rival the state’s e-CNY.
- Hong Kong’s crypto ambitions face new pressure from Beijing’s tightening control.
Chinese regulators have reportedly stopped Ant Group and JD.com from continuing their stablecoin projects in Hong Kong. According to the Financial Times, both companies were told by the People’s Bank of China and the Cyberspace Administration of China not to proceed.
The two companies had already applied to receive approval to launch yuan-backed stablecoins in the new licensing system of Hong Kong. Nonetheless, the central bank also had worries that the existence of the private digital currencies would rival the state-run digital yuan, which is called the e-CNY.
Authorities are worried that by letting the commercial organizations issue stablecoins, they could undermine the monetary power of China. They are also concerned that these coins may interfere with the stability of the financial system. This has forced both the Ant Group and JD.com to halt their respective token projects in the meantime.
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Governor of PBoC, Zhou Xiaochuan, also made such claims during a closed financial meeting. He was also concerned that the creation of stablecoins without full reserve back-up may result in the excessive money creation. According to Zhou, the Hong Kong Stablecoin Ordinance, as well as the U.S. GENIUS Act, are trying to deal with these hazards. However, he also noted that the existing measures are still too weak to stabilize in the long term.
Beijing Moves to Rein in Hong Kong’s Crypto Ambitions
Hong Kong also launched a stablecoin licensing framework to welcome crypto companies around the world and increase innovation. Seventy-seven companies had expressed interest in the application, including Ant Group and JD.com.
Nevertheless, facing such openness, regulators in mainland China have been working to halt some projects related to crypto in the region. They have also recommended that leading brokerages put off the plans of real-world asset tokenization. In August, authorities were reported to request that big companies cease releasing research that endorses stablecoins.
These moves underscore the increasing concerns that the city of Beijing has had about private digital finance. The general government strives to retain the monetary issuance of any kind in official institutions.
Hong Kong’s effort to become a regional crypto hub continues, but Beijing’s message remains firm. The e-CNY or the central bank will not permit the challenge of the stablecoin by the private stablecoins.
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