China Halts Stablecoin Plans by Major Tech Firms
China’s top tech companies have paused their stablecoin projects. This followed direct orders from Beijing. The government raised concerns about privately issued digital currencies gaining too much influence.
Alibaba-backed Ant Group and JD.com planned to join Hong Kong’s pilot stablecoin program. They aimed to issue asset-backed digital tokens and tokenized bonds. However, sources say both companies stopped after mainland regulators intervened. The People’s Bank of China (PBoC) and the Cyberspace Administration of China (CAC) instructed them to halt progress.
Regulatory Concerns Over Control and Digital Yuan
PBoC officials advised against joining Hong Kong’s stablecoin rollout. They worried about private firms issuing 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?” a source told the Financial Times.
The central bank fears that private stablecoins could compete with its digital yuan (e-CNY). The e-CNY project aims to modernize China’s payment system and increase state control over digital money.
Global Stablecoin Regulation and China’s Response
China’s move reflects a global trend of stricter stablecoin regulation. Regulators worldwide worry that dollar-pegged stablecoins might disrupt financial systems. The European Central Bank warned that such stablecoins could limit its monetary policy control.
In August, the Hong Kong Monetary Authority (HKMA) invited applications from stablecoin issuers. Hong Kong is now a key testing ground for regulated digital currency. Mainland companies showed strong interest, including plans for renminbi-backed stablecoins to boost yuan internationalization.
Former Chinese finance vice-minister Zhu Guangyao said the US promotes stablecoins to maintain dollar dominance. He urged China to develop a yuan-pegged digital alternative as part of a long-term strategy.
Beijing’s Caution After Former PBoC Governor’s Warning
In July, former PBoC governor Zhou Xiaochuan called for caution at a financial forum. He warned against stablecoins being used for asset speculation. Zhou said this could lead to fraud and financial instability.
He also questioned the need for tokenization. Zhou argued that stablecoins might not significantly reduce costs in the current payment system, especially for retail payments.
China’s stance is clear: innovation is encouraged, but currency control stays with the state.
The PBoC, HKMA, CAC, Ant Group, and JD.com did not comment on the issue.
