Chinese tech giants halt stablecoin launch plans in Hong Kong due to regulatory concerns from the People’s Bank of China and the Cyberspace Administration, amid Beijing’s concern about digital currencies that may challenge the digital yuan.
Major Chinese technology companies, including companies backed by “Alibaba” and “JD.com,” have halted their plans to launch stablecoins in Hong Kong after warnings from Chinese regulators, such as the People’s Bank of China and the Cyberspace Administration. This decision comes amid growing concerns in Beijing about the rise of privately controlled digital currencies, which are seen as potentially challenging the digital yuan project being developed by the Chinese central bank.
Informed sources reported that Chinese officials had warned against participating in the initial offering of stablecoins due to potential systemic risks. They also expressed concern about who would have the ultimate right to issue these currencies, and whether the central bank would retain the final say or whether the authority would be in the hands of private companies. Reports indicated that the widespread adoption of stablecoins could limit the ability of central banks to control monetary policy, a warning that has already been emphasized by regulators in Europe and America.
This development coincides with Beijing’s increased interest in the Hong Kong pilot program, which aims to promote the international use of the digital renminbi. These efforts come as part of China’s endeavor to counter the financial dominance of the US dollar. Former officials have called for the development of a stablecoin linked to the renminbi and the exploitation of the pilot program in Hong Kong as part of a national financial strategy, while emphasizing the need to consider potential risks to financial stability.
source: 961 today
