China Blocks Major Tech Giants from Hong Kong Stablecoin Plans

The Financial Times broke the story on October 18, 2025, revealing that China’s central bank and internet regulator stepped in to stop the initiatives. The intervention raises serious questions about who controls digital money—private companies or governments.

Chinese regulators have ordered two of the country’s largest technology companies to abandon their plans to launch stablecoins in Hong Kong. Ant Group and JD.com received direct instructions from Beijing to halt their projects, dealing a major blow to Hong Kong’s push to become a global digital finance hub.

What Happened

The People’s Bank of China (PBoC) and the Cyberspace Administration of China (CAC) told both companies to freeze their stablecoin projects. According to sources familiar with the matter, regulators expressed concern about letting technology companies and brokerages issue any currency.

“The real regulatory concern is, who has the ultimate right of coinage—the central bank or any private companies on the market?” one person close to the discussions explained.

This came as a shock because both companies had publicly announced their participation in Hong Kong’s stablecoin program just months earlier. Ant Group, which is backed by e-commerce giant Alibaba, said in June it would join the pilot program. JD.com made similar commitments and even registered trademarks for “Jcoin” and “Joycoin” through its finance division.

JD.com’s founder Richard Liu had big plans. At a media briefing in Beijing in June, he announced the company would apply for stablecoin licenses in every major country worldwide. Liu believed the technology could slash payment costs by 90% and reduce transfer times to under 10 seconds.

Hong Kong’s Regulatory Framework

Hong Kong launched its official stablecoin licensing system on August 1, 2025. The new rules require anyone issuing stablecoins in Hong Kong—or stablecoins tied to Hong Kong dollars—to get a license from the Hong Kong Monetary Authority (HKMA).

The regulatory framework attracted significant interest. By September 30, the HKMA received 36 formal license applications. This was about half of the 77 companies that initially expressed interest in August.

Hong Kong officials plan to announce the first batch of licensed stablecoin issuers in early 2026. The city hoped to position itself as a regulated center for digital assets, offering clear rules that would attract major international companies.

The intervention from Beijing undermines these efforts. Without support from major mainland technology companies, Hong Kong’s stablecoin ecosystem may struggle to attract the large issuers and institutional backing it needs to compete globally.

Warning Signs From Earlier This Year

The October halt didn’t come completely out of nowhere. Several events throughout 2025 hinted at Beijing’s growing discomfort with private stablecoins.

In August, Chinese regulators ordered local companies to stop promoting stablecoins through research reports and seminars. Authorities cited concerns that stablecoins could enable illegal fundraising, online gambling, fraud, and money laundering.

Former central bank governor Zhou Xiaochuan issued a warning in July during a closed-door meeting. He cautioned that stablecoins could trigger excessive speculation and potentially destabilize the financial system. Zhou questioned whether stablecoins offered real benefits, noting that China’s existing payment systems already work efficiently and cheaply.

In September, the financial news outlet Caixin Global reported that Beijing was telling mainland firms to scale back their Hong Kong crypto activities. The article was removed shortly after publication, sparking speculation about direct government intervention. The report warned companies to avoid using Hong Kong as a backdoor to bypass mainland regulations.

Why Beijing Is Concerned

Chinese authorities worry that private stablecoins threaten government control over the monetary system. Regulators fear these digital currencies could undermine the state-backed digital yuan, also known as the e-CNY, which China has been developing and rolling out across the country.

The intervention reflects China’s broader strategy of promoting its own central bank digital currency while restricting privately issued alternatives. Beijing wants to maintain its monopoly over monetary policy and digital yuan development.

Capital controls also play a role. China maintains strict rules about moving money in and out of the country. Stablecoins could potentially help people bypass these controls, creating risks for financial stability.

The dollar dominance issue matters too. Global stablecoin markets are worth about $314 billion as of October 2025, with U.S. dollar-pegged tokens making up over 99% of the market. Former Vice Minister of Finance Zhu Guangyao stated in June that the United States uses stablecoins to maintain the dollar’s global power. He suggested China should develop renminbi-based stablecoins as part of its national financial strategy.

Yet the yuan accounts for less than 3% of global payments while the dollar holds 48%. This massive gap concerns Chinese officials who want to increase their currency’s international role.

What Happens Next

Neither Ant Group nor JD.com has officially commented on the reports. The PBoC, CAC, and Hong Kong Monetary Authority have also stayed silent. An HKMA spokesperson told Reuters the authority doesn’t comment on market rumors.

For Hong Kong, the damage may be lasting. The city’s role as a testing ground for Chinese financial innovation is shrinking. State control is extending further into tokenization and digital assets, even in the semi-autonomous region.

China has made its position clear—private companies won’t be issuing digital currencies, even in Hong Kong. This decision reinforces Beijing’s commitment to state control over the financial system and shows that mainland policy priorities will dictate Hong Kong’s digital asset future. The global stablecoin industry now faces a divided world: Western markets embracing regulated private innovation and China maintaining absolute government authority over digital money.