Hong Kong’s digital asset activities, particularly its recent stablecoin legislation, have been viewed as a petri dish for potential Chinese activities. However, the excitement around Hong Kong’s stablecoin plans – it attracted 77 expressions of interest, including several from Chinese state banks – appears to have prompted a backlash. Previously China’s Ant Group (owner of Alipay) and JD.com had announced plans to issue stablecoins, but that now appears less likely, especially in renminbi. There also could be a geopolitical angle at play, explored below.
The first indication of China’s hesitancy was on 13 October, when Hong Kong’s Legislative Council made an announcement about stablecoins. It said that mainland central government support was needed in order to introduce offshore renminbi stablecoins.
Additionally, on Saturday the Financial Times reported that Ant Group and JD.com had been instructed to put stablecoin plans on hold by the People’s Bank of China (PBoC) and Cyberspace Administration of China (CAC), citing sources. This sounded as if it applied to all stablecoin issuance, rather than just renminbi denominated digital currency. A JD.com subsidiary was one of just three groups involved in Hong Kong’s stablecoin sandbox, prior to the enactment of legislation.
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