Several major Chinese technology firms have paused plans to launch stablecoins in Hong Kong following instructions from mainland authorities. Representatives from companies backed by Alibaba and JD.com had earlier indicated they would join Hong Kong’s pilot stablecoin scheme or develop other virtual asset-based products, including tokenised bonds. However, sources familiar with the matter said these initiatives have been suspended after guidance from regulators such as the People’s Bank of China and the Cyberspace Administration of China.
According to people briefed on the matter cited by the Financial Times, the central bank advised against allowing private firms or brokerages to issue any form of currency, reflecting general concerns about the growth of privately managed digital assets. Officials reportedly viewed the emergence of company-backed stablecoins as potentially undermining the PBoC’s digital yuan, known as the e-CNY.
Beijing’s concerns over control of currency issuance
Those familiar with the discussions said the question at the centre of the debate is who should retain the authority to issue currency, namely, the central banks or private enterprises. The caution comes in the context of wider international scrutiny of stablecoins, which are digital tokens typically pegged to fiat currencies such as the US dollar.
For instance, regulators in Europe and elsewhere have raised similar worries. The European Central Bank has warned that extensive use of dollar-linked stablecoins could interfere with monetary policy within the eurozone.
In August, the Hong Kong Monetary Authority (HKMA) opened applications for stablecoin issuance, positioning the city as a testing environment for financial innovation under Chinese oversight. Interest among mainland institutions initially grew, with some officials arguing that renminbi-denominated stablecoins might encourage greater international use of the yuan.
Yet momentum slowed after senior Chinese policymakers urged caution. At recent financial forums, PBoC officials emphasised the need for careful evaluation of tokenisation and stablecoin projects, citing potential risks of speculation and systemic instability.
