Chinese technology giants including Ant Group and JD.com have reportedly paused plans to issue stablecoins in Hong Kong after Beijing raised concerns about the growing influence of privately issued digital currencies.
According to reports citing unnamed sources, the companies halted their stablecoin initiatives after receiving guidance from Chinese regulators, including the People’s Bank of China and the Cyberspace Administration of China, advising them not to proceed.
Stablecoins are a type of cryptocurrency designed to maintain a steady value by being pegged to an asset or basket of assets, most commonly a fiat currency such as the U.S. dollar.
In May, Hong Kong passed legislation establishing a licensing framework for stablecoin issuers, providing long-awaited regulatory clarity for the sector. Ant Group and JD.com had previously indicated they planned to participate in the city’s stablecoin pilot program.
However, the report said the central bank cautioned against taking part in the initial rollout, citing concerns over allowing technology companies and brokerages to issue currency-like instruments. Privately issued stablecoins are also viewed as a potential challenge to China’s own digital currency project, the e-CNY.
A spokesperson for the Hong Kong Monetary Authority declined to comment on market speculation.
Under the new law, any entity issuing stablecoins in Hong Kong or issuing stablecoins backed by the Hong Kong dollar must obtain a license from the HKMA. The regulator began accepting applications in August, positioning Hong Kong as a testing ground for digital asset initiatives tied to the mainland.
HKMA Deputy Chief Executive Darryl Chan has said that only a limited number of licenses will be granted in the first phase, noting that institutions engaging with the regulator are primarily exploring stablecoins pegged to the Hong Kong dollar and the U.S. dollar.
