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VISTORBELITUNG.COM,HONG KONG – In a sharp sign of mainland China’s enduring caution over privately issued currencies, major Chinese tech powerhouses, including Alibaba-backed Ant Group and e-commerce giant JD.com, have reportedly paused their stablecoin initiatives in Hong Kong. The abrupt stop comes after regulators in Beijing raised serious concerns about the proliferation of digital currencies outside of state control, according to a report by the Financial Times (FT).
The move marks a significant setback for Hong Kong’s ambitious drive to establish itself as a global hub for digital assets, an effort that included setting up a clear licensing framework for fiat-referenced stablecoins.
Sources familiar with the matter told the FT that the tech giants, which had previously expressed keen interest in participating in Hong Kong’s pilot stablecoin program, were instructed to stand down by central authorities. Directives reportedly came from key Chinese regulators, including the People's Bank of China (PBoC) and the Cyberspace Administration of China (CAC).
The core of Beijing's concern centers on a fundamental question: "Who has the ultimate right of coinage the central bank or any private companies on the market?"
Regulators view the issuance of currencies, even stablecoins pegged to fiat, as a prerogative of the state. Allowing major tech conglomerates and brokerages to issue any form of currency is perceived as a direct challenge to the PBoC's monetary authority and a potential threat to financial stability.
The hesitation is also closely linked to the fate of China’s own central bank digital currency, the e-CNY (Digital Yuan), which has struggled with widespread adoption. Privately run stablecoins, particularly those pegged to the Yuan, are seen as potential competitors that could complicate and undermine Beijing's efforts to promote its state-controlled digital currency both at home and abroad.
Despite Hong Kong’s legislature passing a bill in May to establish a clear licensing regime for stablecoin issuers, the city's aspirations are now being carefully managed by mainland oversight. The regulatory pushback is not limited to stablecoins; Chinese regulators have also reportedly moved to curb tokenization activities tied to real-world assets (RWA) by local brokerages in Hong Kong, signaling a broader strategy to ensure digital finance innovation remains aligned with and subordinate to state priorities.
The intervention serves as a powerful reminder that while Hong Kong pursues a more open approach to virtual assets, the ultimate direction of digital finance for Chinese-linked firms remains firmly dictated by regulators in Beijing.