According to sources familiar with the matter, firms including Ant Group and JD.com paused their involvement in Hong Kong’s pilot program after guidance from the People’s Bank of China (PBoC) and the Cyberspace Administration of China (CAC). Regulators reportedly warned against any activity that might blur the boundary between state and private control over currency issuance.
“The question isn’t technology,” one insider said. “It’s who gets to mint money.”
The PBoC views private stablecoins as potential competitors to the e-CNY, China’s state-backed digital currency. Officials fear that allowing private companies to issue tokens pegged to fiat currencies could undermine the central bank’s authority and complicate oversight.
Stablecoins have become vital to global crypto trading, but their dominance by U.S. dollar–backed tokens has raised alarms worldwide. JPMorgan estimates the sector could reach $500 billion to $2 trillion, reinforcing the dollar’s global influence rather than weakening it.
Hong Kong’s Monetary Authority (HKMA) had invited issuers to apply for stablecoin licenses earlier this year, drawing interest from mainland fintech giants eager to launch RMB-linked tokens and tokenized bond products. That enthusiasm faded quickly after former PBoC governor Zhou Xiaochuan cautioned against speculative use of stablecoins and urged regulators to move slowly.
By midyear, sentiment had shifted decisively back toward control. What began as an effort to expand China’s digital finance footprint has now become a warning against overreach.
For Beijing, the message is unmistakable: innovation is welcome, but the power to issue money remains firmly in state hands.
Source: Reuters
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