tl;dr
China halts private stablecoin projects in Hong Kong, targeting Ant Group and JD.com, as part of a broader strategy to reinforce state control over financial systems and align with Beijing's regulatory priorities.
**China Cracks Down on Private Stablecoin Ambitions in Hong Kong, Reinforcing State Control Over Monetary Policy**
China has taken a decisive step to curb private stablecoin initiatives in Hong Kong, signaling a broader effort to consolidate state authority over monetary policy and align the region’s financial framework with Beijing’s regulatory priorities. Two major Chinese tech firms, Alibaba-backed Ant Group and JD.com, have been instructed to halt their plans to launch stablecoins in Hong Kong, following directives from the People’s Bank of China (PBoC) and the Cyberspace Administration of China. The move underscores Beijing’s growing concern over the risks posed by private digital currencies and their potential to undermine centralized financial control.
The decision comes amid heightened scrutiny of crypto-related activities in Hong Kong, which has long been viewed as a potential gateway for mainland companies to circumvent China’s strict crypto regulations. The PBoC and its regulators have warned against private entities issuing “currency-like assets,” emphasizing the need to prevent disruptions to capital supervision and avoid conflicts with the e-CNY, China’s central bank digital currency (CBDC). A report by the *Financial Times* revealed that the directive aims to ensure compliance with Beijing’s broader strategy, which prioritizes disciplined innovation within state-defined boundaries.
Joshua Chu, a lawyer, lecturer, and co-chair of the Hong Kong Web3 Association, highlighted the implications of the crackdown. “Beijing’s intention is not to allow Hong Kong to serve as a loophole for mainland firms to bypass crypto restrictions,” he stated. He noted that China’s crypto strategy has long rejected speculative retail participation within the mainland, framing the latest actions as a “natural refinement” toward responsible innovation rather than speculative hype. “Hong Kong’s reputation depends on maintaining a clean, sophisticated framework that supports genuine market growth without undermining Beijing’s policies,” Chu added.
The move also reflects a shift in Hong Kong’s role in the digital asset landscape. While the region had previously attracted interest from tech firms seeking to leverage its financial infrastructure, Beijing is now prioritizing a regulatory approach that channels foreign crypto capital into controlled channels. Chu emphasized that private stablecoins are not intended to facilitate domestic transactions but rather to absorb international investment, aligning with China’s broader goal of managing cross-border financial flows.
Ant Group, which had partnered with Circle to explore cross-border settlements using USDC, and JD.com, which had pursued global stablecoin licenses to reduce costs, were among the firms affected. The PBoC’s warnings cited risks of blurring the lines between financial technology and sovereign monetary policy, as well as potential overlaps with the e-CNY. This follows earlier analyses suggesting a fragmented approach in China’s stablecoin strategies, where state-backed banks, licensed payment firms, and private fintech companies pursued separate models without a unified framework.
The crackdown extends beyond stablecoins. Late last month, regulators reportedly ordered mainland-linked brokerages to pause real-world asset tokenization efforts in Hong Kong, further signaling Beijing’s caution toward privately managed blockchain projects. These actions come amid broader reviews of cross-border financial activities, as authorities seek to balance innovation with regulatory oversight.
For Hong Kong, the move represents a recalibration of its role as a financial hub, with Beijing asserting greater control over the region’s digital economy. While the city has historically served as a bridge between mainland China and global markets, the latest directives highlight the challenges of navigating regulatory divergences. As China continues to prioritize state-led monetary policies, the future of private digital currencies in Hong Kong remains tightly constrained—reflecting a broader trend of balancing innovation with the preservation of financial sovereignty.