TLDR
- Chinese regulators ordered Ant Group and JD.com to stop their Hong Kong stablecoin projects
- The People’s Bank of China says only the state can issue currency, not private companies
- Both tech giants planned to apply for licenses under Hong Kong’s new stablecoin framework launched in August 2025
- Beijing wants to protect the digital yuan from competition with private stablecoins
- China Securities Regulatory Commission also halted tokenization projects by local brokerages in Hong Kong
China has ordered two of its largest technology companies to abandon their stablecoin projects in Hong Kong. Ant Group and JD.com received direct warnings from the People’s Bank of China and the Cyberspace Administration of China.
The message from Beijing was clear. Private companies should not issue digital currencies that function like money. Regulators stated that currency issuance remains the exclusive right of the state.
Both companies had expressed interest in Hong Kong’s new stablecoin licensing program. The Hong Kong Monetary Authority launched the framework in August 2025 following legislation passed in May.
Ant Group publicly announced plans in June to apply for a stablecoin license. JD.com was developing an offshore yuan-backed stablecoin specifically for the Hong Kong market.
Beijing Prioritizes Digital Yuan Protection
Chinese regulators are concerned about threats to monetary sovereignty. Officials worry that private stablecoins could compete directly with the state-backed digital yuan.
The e-CNY is currently being tested by hundreds of millions of users across mainland China. Beijing views private stablecoins linked to the yuan as potential competition that could reduce adoption of the official digital currency.
Initial enthusiasm for Hong Kong’s program has disappeared since late August. Former People’s Bank of China governor Zhou Xiaochuan spoke at a private forum that month.
Zhou warned that stablecoins could be used for speculation or fraudulent activities. He questioned whether these tokens provided meaningful benefits for regular retail payments.
The China Securities Regulatory Commission has expanded its crackdown beyond stablecoins. The agency ordered local brokerages to stop certain real-world asset tokenization projects in Hong Kong.
Hong Kong’s Independence Faces Limits
Hong Kong has promoted itself as a major Web3 and digital asset hub in Asia. The territory launched multiple pilot programs for stablecoin issuance and blockchain tokenization this year.
The suspension of projects from major mainland companies reveals the boundaries of Hong Kong’s regulatory autonomy. Some Chinese officials initially supported yuan-pegged stablecoins as a way to expand the currency’s global influence.
They believed tokens issued through Hong Kong could challenge the dominance of US dollar-backed stablecoins. That strategy has been abandoned as Beijing emphasizes financial stability over innovation.
By mid-October, both Ant Group and JD.com had quietly withdrawn from their stablecoin plans. The companies complied with Beijing’s instructions to pause all related activities.
Limited Licenses Expected
Hong Kong authorities continue accepting stablecoin license applications. However, officials have warned that only a small number of licenses will be approved initially.
All applicants will face strict scrutiny before receiving approval. The regulatory action shows China’s approach to digital currencies remains focused on state control.
Innovation must align with national strategic objectives. Companies seeking to operate in Hong Kong will face increased oversight of tokenization and digital payment projects.
Global Web3 companies hoping to access Chinese markets must accept these restrictions. Doing business in the region requires complete alignment with state monetary sovereignty principles.
The crackdown reinforces Beijing’s commitment to the digital yuan as the only sanctioned digital currency option. Private alternatives are not welcome regardless of their backing or structure.
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