China’s leading tech firms have quietly put their stablecoin ambitions on hold after a direct intervention from Beijing, which raised red flags over the growing influence of privately issued digital currencies.
Alibaba-backed Ant Group and e-commerce giant JD.com were among the companies gearing up to participate in Hong Kong’s pilot stablecoin programme, with plans to issue asset-backed digital tokens and tokenized bonds.
But multiple sources familiar with the matter said both firms halted progress after receiving clear instructions from mainland regulators, including the People’s Bank of China (PBoC) and the Cyberspace Administration of China (CAC), to stand down.
Concerns over control and China’s digital yuan project
Officials from the PBoC reportedly advised against joining Hong Kong’s first stablecoin rollout, citing unease about allowing private players to issue currency-like products. “The real regulatory concern is, who has the ultimate right of coinage — the central bank or any private companies on the market?” one person familiar with the briefings told the Financial Times.
The central bank’s stance reflects broader worries that privately managed stablecoins could compete with its own digital yuan (e-CNY), a flagship project aimed at modernizing China’s payment infrastructure and tightening state oversight of digital money.
A global echo of stablecoin caution
China’s latest move isn’t happening in isolation. Regulators worldwide are tightening their stance on stablecoins, wary of how dollar-pegged tokens could disrupt financial systems. The European Central Bank (ECB) has also raised alarms, saying that the growing use of dollar-backed stablecoins could limit its ability to steer monetary policy.
Meanwhile, in August, the Hong Kong Monetary Authority (HKMA) opened applications for stablecoin issuers, turning the city into a closely watched testing ground for regulated digital currency innovation. Interest from mainland players surged over the summer, with discussions even exploring renminbi-backed stablecoins to promote the yuan’s internationalisation.
Zhu Guangyao, China’s former Vice-Minister of Finance, had earlier argued that “the strategic purpose behind the US promotion of stablecoins is to preserve dollar supremacy”, urging China to respond with a yuan-pegged digital alternative as part of its long-term financial strategy.
Beijing turns cautious after Zhou Xiaochuan’s warning
Momentum shifted after former PBoC Governor Zhou Xiaochuan urged restraint during a July financial forum. “We need to be vigilant against the risk of stablecoins being excessively used for asset speculation, as misdirection could trigger fraud and instability in the financial system,” he said.
Zhou also questioned the actual need for tokenization, arguing that “although many believe stablecoins will reshape the payments system, in reality, there is little room to cut costs in the current system, particularly in retail payments.”
For now, China’s message is clear: innovation is welcome, but when it comes to currency, control will remain firmly in the hands of the state.
Neither the PBoC nor HKMA commented on the matter, while CAC, Ant Group, and JD.com did not respond to requests for comment.
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