Hong Kong to issue limited stablecoin licences amid regulatory shifts
In June 2025, stablecoins gained sudden prominence within China’s financial and technology sectors following pivotal regulatory developments. At the Lujiazui Forum in Shanghai, Pan Gongsheng, Governor of the People’s Bank of China (PBoC), announced new policy directions concerning digital assets. Shortly thereafter, the International Monetary Fund (IMF) expressed its support for stablecoin frameworks.
Major corporations such as Ant Group and JD.com began exploring stablecoin applications. Simultaneously, Guotai Junan International’s stock price surged significantly, reportedly due to its involvement in the sector. These developments have sparked a wave of institutional interest across China.
From crypto ban to stablecoin integration
China banned cryptocurrency trading entirely in 2021, citing concerns over financial system stability. However, by mid-2025, the regulatory landscape has evolved, with stablecoins emerging as key instruments for financial modernisation.
At the June 2025 Lujiazui Forum, Governor Pan Gongsheng emphasised the potential of stablecoins and the digital yuan to enhance cross-border payment systems and reduce reliance on legacy infrastructure such as SWIFT.
China is also actively exploring the development of yuan-denominated stablecoins. This initiative is viewed as part of a broader strategy to elevate the renminbi’s role in global trade and modernise the nation’s financial infrastructure.
Global developments fuel momentum
In May 2025, the United States officially recognised stablecoins as regulated digital representations of the US dollar through the passage of the GENIUS Act. The legislation mandates full dollar reserves for issuance, signalling institutional support for stablecoins within the US financial system.
Chinese policymakers have expressed concern over this development, viewing the rise of US dollar-backed stablecoins as a potential extension of American financial influence. In response, China is accelerating efforts to develop yuan-backed stablecoins as part of a broader strategy to reinforce monetary sovereignty and reduce dependence on the US dollar in cross-border transactions.
Hong Kong’s targeted stablecoin licensing approach
On 30 May 2025, Hong Kong enacted the Stablecoins Ordinance, establishing a legal framework to regulate fiat-backed stablecoins. The law, set to take effect on 1 August 2025, introduces a licensing regime for entities involved in issuing or offering stablecoins.
While the government may issue licences this year, the number is expected to remain limited. In a recent interview with local media, Christopher Hui, Secretary for Financial Services and the Treasury, stated that the government aims to issue licences “in the single digits” in 2025.
Although earlier regulatory sandbox programmes and the new regime primarily focus on stablecoins pegged to the Hong Kong dollar, the local crypto industry is increasingly turning its attention to offshore yuan-pegged stablecoins—reflecting China’s broader ambitions.
Chinese tech firms expand initiatives
JD.com founder Richard Liu has announced plans to pursue stablecoin licences across multiple jurisdictions. The company is exploring the integration of digital currencies into its broader financial services strategy. Ant Group’s digital division has completed regulatory sandbox testing in Hong Kong and is now applying for formal licences. The firm is also expanding its stablecoin-related operations to Singapore and Luxembourg, indicating a push towards international deployment.
Other companies—including Linklogis, RD Technologies, Standard Chartered, and ZA Bank—have also entered the stablecoin space. These developments underscore growing institutional interest in regulated digital currency infrastructure.
China’s strategic position
With increasing regulatory support, China is positioning itself to influence the development of global digital currency standards, particularly through initiatives in Hong Kong. The combination of regulatory clarity, corporate involvement, and international interest suggests that stablecoins are on the path to broader adoption within financial systems.
