According to the Financial Times, the Chinese government has slowed down the process by interfering with the projects of major technology companies planning to issue stablecoins in Hong Kong. Beijing Halts Plans for Chinese Tech Giants to Issue Stablecoins in Hong Kong The news, based on sources close to the matter, stated that Alibaba subsidiary Ant Group and JD.com were affected by these initiatives. Both companies had previously requested permission to issue yuan-pegged stablecoins in closed-door meetings with officials from the People's Bank of China (PBoC), shortly before Hong Kong's new stablecoin licensing regime came into effect. However, both the PBoC and the Cyberspace Administration of China have advised these companies to suspend their plans, the Financial Times reported on Sunday. Five different sources reported that the PBoC is concerned about private companies issuing any form of “currency,” adding that such stablecoins could pose potential competition to the digital yuan (e-CNY), whose use remains limited. Speaking at a closed finance forum in late August, former PBoC chairman Zhou Xiaochuan highlighted two key concerns regarding the stability of stablecoins: “First, there is the risk of excessive money supply through stablecoin issuance without 100% reserve requirements. Second, there is the multiplier effect of highly leveraged monetary derivatives.” Zhou emphasized that while both the US’s GENIUS Act and Hong Kong’s Stablecoin Regulation have addressed these issues, control mechanisms are still inadequate. Ant Group and JD.com were among 77 companies interested in obtaining stablecoin licenses, according to data released by the Hong Kong Monetary Authority in September. While Hong Kong aims to become a “regulatory sandbox” hub for crypto and digital asset startups, authorities in mainland China are taking a more cautious stance. Chinese regulators have recently clamped down on efforts to tokenize real assets in Hong Kong. Some major brokerage firms were advised to suspend these projects and were also asked to stop publishing research reports supporting stablecoins. *This is not investment advice. Continue Reading: Chinese Government Slows Down Tech Companies' Plans to Launch Stablecoins! Details Here
