The mainland Chinese government has stepped in to halt efforts by major tech companies to issue stablecoins offshore, reinforcing its firm grip on monetary control and prioritising its central bank digital currency, the e‑CNY. Firms such as Ant Group and JD.com had publicly explored participating in the newly-minted Hong Kong stablecoin regime, but recent directives from the People’s Bank of China (PBoC) and the Cyberspace Administration of China (CAC) have forced them to pause.
The State’s Monetary Turf
Beijing’s concern centres on the idea that private corporations issuing fiat-pegged tokens could undercut the authority of the central bank and blur the boundaries between money-creation and corporate finance. In remarks captured by insiders, one central banker bluntly flagged the issue: “ who gets to mint money? ”
Financial Times
Hong Kong remains a notable exception in Greater China in that it passed a law on August 1 establishing a licensing framework for fiat-backed stablecoins. Yet even there, Chinese regulators lodged caution against private-sector currency issuance that falls outside strict state control.
Strategic Context: e-CNY & Global Yuan Ambitions
The PBoC is fast-tracking the deployment of the e-CNY as a cornerstone of China’s digital finance strategy, especially to promote the yuan’s use internationally. At the same time, the momentum behind U.S.-dollar-pegged stablecoins has alarmed Beijing, which views them as a challenge to the yuan’s role in global payments.
Hong Kong’s stablecoin pathway had been viewed by tech firms as a gateway to issuing tokens backed by the offshore yuan or Hong Kong dollar. But the recent regulatory push-back makes clear that without direct state oversight or cooperation, the mainland government will not allow the private sector free rein in currency creation.
Implications for the Industry
- Tech-finance models constrained: Tech companies that had targeted stablecoin issuance will need to adjust their strategy or partner more closely with state institutions.
- e-CNY remains central: China’s digital yuan remains the dominant, and possibly exclusive, platform for large-scale digital currency deployment under state control.
- Global stablecoin innovation may skew offshore: If China restricts private stablecoins internally, innovation may flow to more permissive jurisdictions instead.
- Signal to global markets: The move emphasises that this isn’t just about technological innovation, it’s about monetary sovereignty.
In short: Beijing is drawing a clear line, digital currency innovation is welcome, but only under state-supervised terms. Any deviation risks regulatory stoppage and strategic sidelining by China’s financial authorities.
