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Chinese officials have effectively stopped the stablecoin plans of two of the country’s biggest internet companies, Alibaba-backed Ant Group and e-commerce leader JD.com, in Hong Kong. This is a clear example of monetary sovereignty.
On October 18, 2025, the Financial Times reported that the People’s Bank of China (PBOC) and the Cyberspace Administration of China (CAC) told people to stop these projects right away. They said they were worried about the private sector controlling currency-like assets and the possibility of threats to financial stability.
This move, which caught industry experts off guard, shows that Beijing still has a firm hold on digital banking, even in Hong Kong, which is a semi-autonomous financial center. The worldwide stablecoin market is now worth more than $295 billion, with USD-pegged tokens like USDT and USDC making up most of it. This measure not only stops innovation, but it also shows a bigger plan to protect the yuan’s dominance and keep the state from losing power in the face of decentralized alternatives. It’s a sobering reminder for Hong Kong’s growing crypto economy that cross-border ambitions must take into account the sensitivities of the mainland, which could make private-sector experimentation in the territory less likely.
Beijing’s Strong Control Over Stablecoin Issuance
The rule came out at the same time as Hong Kong’s ambitious stablecoin licensing system, which went into force on August 1, 2025, and requires issuers of fiat-referenced stablecoins to get permission from the Hong Kong Monetary Authority (HKMA). At first, the framework was seen as a step forward to make the city Asia’s Web3 gateway. It welcomed applications from companies in mainland China, such as Ant Group’s declaration in June that it would join the pilot and JD.com’s interest in yuan-based tokens like “Jcoin.” Ant, which processes $17 trillion a year through its Alipay service, and JD.com, which has 600 million users, viewed Hong Kong as a place to test cross-border efficiency. They were able to cut payment expenses by up to 90% and complete payments almost instantly.
But officials from the PBOC and CAC acted quickly, telling executives to drop the plans. The main concern, according to people who know about the talks, is “who has the ultimate right of coinage: the central bank or private companies?” This is similar to what Zhou Xiaochuan, the previous head of the PBOC, said in 2022 about how too many stablecoins could cause capital flows to become unstable. Beijing sees private stablecoins as a threat to monetary policy, especially because they could hurt the e-CNY (digital yuan), which has handled 1.8 trillion yuan ($250 billion) since 2022 and wants to be allowed to work with other currencies without losing state control.
Neither Ant nor JD.com has said anything formal, but the pause goes beyond stablecoins: The China Securities Regulatory Commission has also told local brokerages to stop trying to tokenize real-world assets (RWA) in Hong Kong because they are worried that the new laws will lead to more fraud. There were a lot of different views on X, from disappointment (@WuBlockchain: “Beijing’s stablecoin veto hits HK hard—private innovation sidelined again”) to analysis (@CryptoLawyerX: “PBOC’s move protects e-CNY, but stifles HK’s fintech edge”).
Mainland Oversight Stifles Promise
Hong Kong’s stablecoin law was a shining example of clear regulation in a confusing environment. It required issuers who wanted to target the Hong Kong dollar or other fiat to have 1:1 fiat reserves, monthly attestations, and HKMA certification. The pilot, which got interest from state-owned companies including China National Petroleum Corporation and Bank of China, aimed to create RMB-pegged tokens to strengthen the yuan’s influence in the world while USD stablecoins make up 99% of the market. Ant and JD.com’s involvement promised to cut costs for cross-border transactions—JD’s Richard Liu imagined 10-second transfers with 90% savings—but Beijing’s refusal shows that Hong Kong’s independence has limits.
The HKMA framework is still new, with only a few approvals so far (for example, JD’s “Joycoin” trademarks were submitted in June). Now, the Securities and Futures Commission (SFC) is warning about fraud, so it needs to be reevaluated.
Ye Zhiheng, an SFC executive, warned that the guidelines could make things more dangerous without meaning to, which led to a wider review. This freeze could make additional mainland companies less likely to join, which would make the pilot more likely to favor state-backed companies and hurt Hong Kong’s hopes of becoming a “global crypto hub” after the 2023 license revisions.
The episode shows that there are problems with how stablecoins are regulated around the world: The U.S. GENIUS Act (July 2025) enables private issuance with protections, while the EU’s MiCA requires similar reserves but lets more people take part. It strengthens China’s preference for regulated innovation in Asia through e-CNY, which processed 1.8 trillion yuan in 2024 even though private stablecoins had a regional volume of $10 trillion.
What this means for the stablecoin market and the world’s finances
The suspension has a big effect on the $295 billion stablecoin market, where USD-pegged tokens like USDT (Tether, $172 billion) and USDC (Circle, $35 billion) hold 99.7% of the market. Euro and yuan tokens make up less than 0.3% of the market. Beijing’s action keeps e-CNY’s sandbox—limited to controlled pilots—but it stops private yuan tokens that could compete with the USD in Belt and Road remittances ($150 billion a year). Ant’s Alipay and JD Pay, which handle trillions of dollars in online shopping, were a strong force for crypto-fiat bridges. They could have taken 10–15% of Hong Kong’s $1.5 trillion payment flow.
The veto makes Hong Kong’s shift to crypto after 2022 less likely, since SFC fraud notices and a downturn from the mainland make investors less confident. Some possible effects are that RWA tokenization could be delayed (for example, bonds through HKMA pilots) and that there could be a shift toward state issuers, similar to Singapore’s Project Guardian but with Beijing’s constraints attached. It strengthens calls for unified standards around the world—G20’s 2025 roadmap aims for interoperability to stop silos—while also drawing attention to the geopolitical flashpoint of stablecoins: private innovation vs. state control.
Conclusion
China’s sudden end to Ant Group and JD.com’s plans for a Hong Kong stablecoin, thanks to orders from the PBOC and CAC, shows how tightly Beijing controls digital money. They are putting e-CNY ahead of private experimentation and slowing down Hong Kong’s fintech rise. This veto protects the yuan’s sovereignty, but it also risks giving up territory to USD giants at a time when stablecoins process $10 trillion in Asian volumes. This shows the conflict between innovation and governmental authority.
For the $295 billion market, this is a warning: It’s important to have clear rules, yet geopolitical tensions can stop even the most daring pilots. As Hong Kong adjusts, the global competition for stablecoin dominance heats up. State-backed RMB tokens may fill the gap, but private companies may hunt for more fertile territory.
