Chinese tech giants including Ant Group and JD.com have reportedly suspended plans to issue stablecoins in Hong Kong after regulators in Beijing raised concerns about privately controlled digital currencies.
The corporations have been ordered by the People's Bank of China (PBoC) and the Cyberspace Administration of China (CAC) to stop these initiatives, the Financial Times reported on Sunday, citing sources aware of the matter.
“The real regulatory concern is who has the last word right to mint – the central bank or some private company available in the market?” A source aware of the discussions told the Financial Times.
Both corporations had expressed interest earlier this yr in joining Hong Kong's pilot stablecoin program or launching tokenized financial products resembling digital bonds.
Hong Kong's stablecoin push is running into difficulties
Hong Kong began accepting applications for stablecoin issuers in August. Mainland officials had initially viewed this system as a chance to advertise renminbi-pegged stablecoins and expand the yuan's international presence.
However, the momentum soon faded as Ye Zhiheng, executive director of the Hong Kong Securities and Futures Commission (SFC)'s intermediary department, warned that the town's recent stablecoin regulatory framework had increased the chance of fraud.
Headquarters of the People's Bank of China, Beijing. Source: Wikimedia
Ye's comments followed stablecoin corporations operating in Hong Kong recording double-digit losses on August 1, shortly after the brand new stablecoin regulation got here into force.
Last month, Chinese financial media Caixin reported that Beijing had restricted Hong Kong's stablecoin activities. However, the report was removed shortly after publication, casting doubt on its claims.
China is reversing its push to tokenize Hong Kong
Last month, China's securities regulator also reportedly ordered several local brokerage firms to pause their real-world asset tokenization (RWA) activities in Hong Kong, indicating Beijing's growing unease over the rapid expansion of offshore digital asset operations.
The move got here as tokenization gained momentum within the country. Last week, CMB International Asset Management (CMBI), a Hong Kong-based subsidiary of a serious Chinese industrial bank, China Merchants Bank (CMB), tokenized its $3.8 billion money market fund (MMF) on BNB Chain.
