As Beijing raises concerns about the rise of privately controlled currencies, Chinese tech giants — Alibaba-backed Ant Group and e-commerce firm JD.com — are pausing plans to issue stablecoins in Hong Kong.
Summary
- Ant Group and JD.com pause Hong Kong stablecoin plans after Beijing warnings.
- PBoC raised sovereignty concerns over private firms issuing currencies.
- Caution follows Zhou Xiaochuan’s warning on speculation and instability.
According to the Financial Times, the companies had announced over the summer that they would participate in Hong Kong’s pilot stablecoin program. But now Chinese regulators, including the People’s Bank of China and the Cyberspace Administration of China, have advised against participation in the initial stablecoin rollout.
PBoC officials expressed concerns about allowing tech groups and brokerages to issue any currency.
The central bank reportedly expressed concern about whether private companies should have “the ultimate right of coinage,”
This caution contrasts with the earlier enthusiasm of some Chinese officials, who viewed renminbi-denominated stablecoins as a strategic response to U.S. dollar dominance.
In June, former Vice Minister of Finance Zhu Guangyao stated that the United States promotes stablecoins to maintain the dollar’s global dominance.
He also suggested that China utilize Hong Kong’s pilot programs and emphasized that a renminbi-based stablecoin should be incorporated into the country’s national financial strategy.
Interest in the Hong Kong program had surged over the summer. Officials also suggested that renminbi stablecoins could boost the yuan’s international use.
Risk assessment outweighs payment innovation benefits
Former PBoC Governor Zhou Xiaochuan has warned about the need for vigilance against stablecoins being excessively used for asset speculation, noting that misdirection could lead to fraud and financial system instability.
He called for careful assessment of tokenization’s actual demand as a technological foundation.
The former governor questioned the potential of stablecoins for payments, stating that “there is little room to cut costs in the current system, particularly in retail payments.”
The Hong Kong Monetary Authority began accepting applications from stablecoin issuers in August. This established the territory as a testing ground for mainland experimentation.
The pushback from Chinese authorities highlights the broader global regulatory tensions surrounding stablecoins.
