China's financial regulators have ordered the country's largest technology companies to abandon plans to launch stablecoins in Hong Kong, dealing a significant blow to the city's ambitions to become a global digital asset hub and underscoring Beijing's determination to maintain absolute control over monetary policy.
Ant Group, the fintech affiliate of e-commerce giant Alibaba, and JD.com, one of China's leading online retailers, have suspended their stablecoin initiatives following direct instructions from mainland authorities, according to the Financial Times.
The intervention came from both the People's Bank of China (PBoC) and the Cyberspace Administration of China (CAC), who advised the companies not to proceed with issuing currency-like digital assets.
The directive raises fundamental questions about the future of privately issued digital currencies in China's sphere of influence and casts uncertainty over Hong Kong's newly launched regulatory framework designed to attract major stablecoin issuers.
Monetary Sovereignty Concerns Drive Intervention
At the heart of Beijing's intervention lies a fundamental concern about who controls the issuance of money — the state or private corporations. According to sources familiar with the matter cited by the Financial Times, Chinese regulators expressed deep unease about allowing technology companies and brokerages to issue any type of currency.
"The real regulatory concern is, who has the ultimate right of coinage, the central bank or any private companies on the market?" one person involved in the discussions told the Financial Times, crystallizing the core issue driving Beijing's decision.
The PBoC, China's central bank, is reinforcing its exclusive authority over monetary issuance even as it continues rolling out the digital yuan (e-CNY), the state-backed central bank digital currency. The intervention signals that private entities — regardless of their size, connections, or sophistication — cannot operate freely in the realm of digital currency issuance.
Former PBoC Governor Zhou Xiaochuan had previously raised concerns about financial instability from over-issued stablecoins during a closed-door meeting in July 2025. He cautioned that stablecoins could trigger excessive speculation and potentially destabilize the financial system, urging careful assessment of tokenization's actual demand as a technological foundation.
Hong Kong's Stablecoin Framework Undermined
The timing of Beijing's intervention is particularly striking given Hong Kong's recent progress in establishing what was intended to be one of Asia's most comprehensive stablecoin regulatory regimes.
Hong Kong's legislature passed the Stablecoins Bill in May 2025, establishing a licensing regime administered by the Hong Kong Monetary Authority (HKMA). The framework officially came into effect on Aug. 1, 2025, requiring any person who issues stablecoins in Hong Kong—or issues stablecoins backed by Hong Kong dollars, whether within or outside the city — to obtain an HKMA license.
The regulatory structure was designed to attract institutional participants while providing robust investor protections. Licensed issuers must maintain minimum paid-up capital of HK$25 million ($3.2 million), plus liquid capital of HK$3 million and excess liquid capital equivalent to at least 12 months of operating expenses. Stablecoins must be backed 100% by high-quality reserve assets, with holders possessing an absolute right to redeem tokens at par value within one business day.
Both Ant Group and JD.com had publicly announced intentions to participate in Hong Kong's stablecoin pilot program. Ant Group said in June it would be participating in the pilot, while JD.com had registered trademarks for "Jcoin" and "Joycoin" through its finance division and made similar commitments.
JD.com founder Richard Liu had articulated ambitious plans at a media briefing in Beijing in June, announcing the company would apply for stablecoin licenses in every major country worldwide. Liu believed the technology could slash payment costs by 90% and reduce transfer times to under 10 seconds.
Brokerages Also Ordered to Halt Tokenization
Beijing's intervention extends beyond stablecoins to encompass broader tokenization activities. China's Securities Regulatory Commission (CSRC) recently told multiple brokerages to pause their tokenization of real-world assets in Hong Kong, according to people familiar with the matter.
The comprehensive nature of the directive indicates Beijing's regulatory control extends offshore despite Hong Kong's ostensibly autonomous financial environment. Chinese authorities appear determined to prevent private sector entities from creating parallel financial infrastructure that could compete with or undermine state-controlled systems.
In August 2025, Chinese regulators ordered local companies to stop promoting stablecoins through research reports and seminars, citing concerns that such instruments could enable illegal fundraising, online gambling, fraud, and money laundering.
Digital Yuan Strategy Takes Priority
The intervention reflects China's broader strategy to establish the digital yuan as the dominant form of programmable money within its sphere of influence. The e-CNY has already undergone extensive testing with hundreds of millions of users on the mainland, representing one of the world's most advanced central bank digital currency implementations.
Beijing views privately issued stablecoins — particularly those pegged to the yuan — as potential threats to this carefully orchestrated monetary infrastructure. Officials are concerned that widespread adoption of private stablecoins could undermine the digital yuan's role in domestic payments and cross-border settlements.
The concerns extend to geopolitical dimensions. Former Vice Minister of Finance Zhu Guangyao stated in June that the United States uses stablecoins to maintain the dollar's global dominance, suggesting China should develop renminbi-based stablecoins as part of its national financial strategy.
Yet the yuan accounts for less than 3% of global payments while the dollar holds 48%, according to SWIFT data. This massive gap concerns Chinese officials who want to increase their currency's international role without ceding control to private sector actors.
The global stablecoin market stands at approximately $314 billion as of October 2025, with U.S. dollar-pegged tokens comprising over 99% of the market. Tether (USDT), the largest stablecoin, held assets including $127 billion in U.S. Treasury securities as of mid-2025, highlighting the scale and systemic importance that Beijing regulators are monitoring with concern.
Official Silence Amid Market Uncertainty
As of Oct. 20, 2025, neither Ant Group nor JD.com has officially commented on the reports of regulatory intervention. The PBoC, CAC, and Hong Kong Monetary Authority have also maintained silence on the matter.
An HKMA spokesperson told Reuters on Sunday that the authority "does not comment on market rumors," declining to address the specific allegations about mainland regulatory interference.
The official silence has left market participants uncertain about the future trajectory of Hong Kong's stablecoin ecosystem. The HKMA had indicated in earlier statements that it expected to grant only a handful of licenses initially, setting a high bar and requiring issuers to demonstrate viable use cases, prudent operations, and the trust of market participants.
With major Chinese technology companies now sidelined, questions remain about which entities will comprise the first wave of licensed issuers and whether the framework can attract sufficient institutional participation to establish Hong Kong as a meaningful stablecoin hub.
Impact on Hong Kong's Digital Asset Ambitions
The intervention represents a significant setback for Hong Kong's efforts to position itself as a leading center for digital asset innovation in Asia. The city has invested substantial regulatory resources and political capital in developing frameworks designed to attract cryptocurrency and blockchain businesses operating under clear rules.
Hong Kong had launched a stablecoin issuer "sandbox" in March 2024 to promote innovation in stablecoin technology and test the feasibility of its regulatory framework. The sandbox allowed participants to experiment with issuance and application of stablecoins in a controlled environment while engaging with regulators.
As of May 2025, participants in the first batch of sandbox testing included JINGDONG Coinlink Technology Hong Kong Limited (a JD.com affiliate), RD InnoTech Limited, and a coalition comprising Standard Chartered Bank (Hong Kong), Animoca Brands, and Hong Kong Telecommunications.
However, the demonstrated willingness of mainland authorities to override local initiatives when systemic financial control is at stake raises questions about the durability of Hong Kong's regulatory autonomy in the digital asset sphere.
"Without support from major mainland technology companies, Hong Kong's stablecoin ecosystem may struggle to attract the large issuers and institutional backing it needs to compete globally," analysts noted.
The episode also highlighted concerns expressed by Hong Kong's own regulators about potential risks. Securities and Futures Commission executive Ye Zhiheng had warned that the new stablecoin rules increased fraud risks, with stablecoin-related firms reporting notable losses on the same day the regulations took effect.
Broader Implications for Private Digital Currencies
Beijing's intervention sends a clear message to the global fintech and cryptocurrency industries: privately issued stablecoins involving mainland-affiliated firms will face heavy scrutiny and likely face constraints when they intersect with China's strategic interests.
The decision reflects a hardening policy line as digital finance continues to evolve globally. While many Western jurisdictions are developing frameworks to accommodate regulated stablecoin issuance by private entities, China appears committed to a model where the state maintains exclusive control over currency-like instruments.
Reports indicate that other major Chinese institutions, including China National Petroleum Corporation and the Bank of China, had also been considering applying for stablecoin licenses through Hong Kong. PetroChina was reportedly exploring yuan-pegged stablecoins for settling cross-border energy transactions.
However, Beijing's latest directive casts uncertainty over whether those applications will progress, suggesting the regulatory crackdown may be broader than initially apparent.
Final thoughts
For foreign stablecoin issuers and Hong Kong-based financial institutions without mainland affiliations, the path forward remains somewhat clearer — though complicated by the demonstrated reality that Beijing can influence Hong Kong's financial sector when core interests are at stake.
The HKMA continues to accept applications from prospective stablecoin issuers, with the first batch of licenses expected in early 2026. International banks, fintech companies, and cryptocurrency firms unencumbered by Chinese regulatory oversight may still view Hong Kong's framework as an attractive entry point for Asian markets.
However, the episode underscores that Hong Kong's role as a bridge between China and global financial markets operates within constraints defined by Beijing's broader policy priorities. In the realm of digital currencies, those priorities appear increasingly focused on maintaining state control and advancing the digital yuan's strategic position.
For Ant Group and JD.com, the suspension of stablecoin ambitions represents a strategic retreat orchestrated by regulators concerned about preserving monetary sovereignty. Both companies must now determine whether and how they can participate in the digital currency ecosystem without challenging the state's fundamental prerogatives over money issuance.
The outcome of Hong Kong's stablecoin licensing process in the coming months will provide crucial signals about whether the city can successfully navigate the competing demands of regulatory innovation and mainland policy alignment — or whether Beijing's intervention marks the beginning of a more constrained approach to digital asset experimentation in the special administrative region.