On August 1st, Hong Kong's "Stablecoin Issuance and Reserve Management Ordinance" officially came into effect. The Hong Kong Monetary Authority's intentions are clear: only stablecoins pegged to the Hong Kong dollar are permitted. Issuers must obtain regulatory licenses, asset reserves must be limited to local currency cash and bonds, and strict audit and custody procedures are required. This regulation also further defines the nature of stablecoins: no longer simply market-driven products, but officially an on-chain financial instrument that extends sovereign currencies. Meanwhile, in mainland China, policy exploration related to stablecoins is also quietly progressing. From Hong Kong to mainland China, stablecoins are no longer a fringe financial innovation topic; they have entered the arena of monetary policy and sovereign governance, and the real focus has shifted. Three Paths to Stablecoin Regulation When stablecoins enter the regulatory landscape, they become more than just a technical issue; they become part of institutional design. While regulatory approaches in different countries and regions may appear to be loosening or tightening, they actually address three key questions: the choice of anchor asset, issuance rights, and clearing logic within the operating system. Currently, the United States, the European Union, and Hong Kong are having a significant impact on the direction of global stablecoin regulation. They represent three distinct institutional models. The United States has chosen a market-driven, institutionally backed approach. In 2025, with the passage of the GENIUS Act, stablecoins officially came under federal regulation. However, regulation does not take over issuance; rather, it defines the anchoring method and backing requirements: You can issue coins, but you must anchor them to the US dollar, maintain compliant reserves, and be audited by the financial system. This means that the right to issue is ceded to the market, while the anchoring authority remains in the hands of the system. From USDC and PYUSD to more soon-to-be regulated dollar stablecoins, the US has effectively established an operating logic based on "open front-end, back-end support." As long as you're pegged to Treasury bonds or cash, your account is traceable and audited, you can issue a "dollar interface" on-chain. The advantage is that the US doesn't need to lead the way, allowing the dollar to naturally permeate every corner of Web3. Stablecoins have become a kind of "dollar clearing API." But therein lies the risk: dollar issuance isn't handled by the central bank, but by companies like Circle and PayPal. If any of these issues arise, such as a loss of reserves, delayed disclosure, or interstate regulatory gaps, the stablecoin's anchor isn't to the dollar, but to trust itself. The European Union has chosen a path of built-in regulation and reduced authority. MiCA subjects stablecoins to extremely strict oversight. Specifically, once a stablecoin reaches a certain circulation scale (such as 10 million users or a market capitalization of €10 billion), it is classified as a "significant token" and subject to intervention by higher-level financial institutions such as the European Central Bank, and may even face restrictions. This is a typical "permission-and-regulate" structure: existence is permitted, but expansion is prohibited. More notably, the ECB and ESMA have both expressed concerns about the widespread use of dollar-pegged stablecoins in the eurozone in multiple policy statements, arguing that they could erode the euro's monetary sovereignty within the region. Against this backdrop, MiCA's strict regulatory approach to stablecoins can be understood as a form of institutional safeguard: allowing limited room for innovation while also curbing their widespread penetration in cross-border settlement and local payments. However, such intense regulation also limits the use cases for stablecoins in the EU and increases issuance costs, making it difficult to stimulate market vitality and support the development of stablecoin-centric business models within the EU. Hong Kong has chosen a pre-licensing, closed-loop approach. Unlike the US's "open peg" and the EU's "institutional framework," Hong Kong's regulatory approach is more like a "pre-set boundary" from the outset: only stablecoins pegged to the Hong Kong dollar (HKD) are permitted to be issued. Pegs to other currencies like the RMB and USD are prohibited, and multi-currency, commodity-pegged, or algorithmic stablecoins are also prohibited. Issuers must be registered in Hong Kong and obtain a stored value facility (SVF) license, and circulation is limited to local payment scenarios approved by regulators.
This "pre-set boundary" institutional design reflects the three intentions of the Hong Kong regulatory authorities:
First, the sovereignty of the anchored currency is clarified, and only the Hong Kong dollar is recognized as a stable anchor to avoid the infiltration of foreign stablecoins into local monetary policy;
Second, the licensing of issuance qualifications, using the SVF framework to incorporate stablecoins into the existing financial regulatory system, and manage them on par with local payment tools such as Alipay Hong Kong and Octopus;
Third, the closed usage scenarios, only allowing small-scale pilot projects in specific payment ecosystems, and temporarily not opening up on-chain cross-border payments, DeFi circulation or exchange uses. This system is essentially a governance model of "embedded regulation of financial instruments," emphasizing that issuance and use must be locked within a regulatory controllable scope from the outset. This approach prioritizes technical verification and risk management for on-chain payments, followed by a gradual evaluation of the path to liberalization. Pegging to the Hong Kong dollar and restricting its use in specific scenarios ensures that on-chain funds are closely tied to the local financial order, positioning Hong Kong for a leading position in Asia's stablecoin infrastructure. However, precisely because of this restrictive design of currency and usage, the openness and external impact of Hong Kong's stablecoin are limited, potentially making it difficult to attract cross-border projects or become a key node in the mainstream Web3 payment network. What will become of the RMB stablecoin? If the regulatory paths for stablecoins in the United States, the European Union, and Hong Kong represent, respectively, "access to the US dollar financial system," "prudential supervision under the financial law framework," and "technological takeover of the local payment market," then they all point to only one core issue: Stablecoins are no longer a technological experiment, but an extension of the monetary system. And this discussion on the "boundaries of currency digitization" has now entered China's policy agenda. In mid-July, the Shanghai State-owned Assets Supervision and Administration Commission organized a high-level meeting to discuss policy responses to stablecoins and crypto assets. Participants included government officials and industry representatives. Companies such as JD.com and Ant Group have proposed to the People's Bank of China to issue stablecoins pegged to the RMB, proposed that "RMB stablecoins can legally apply for licenses in Hong Kong," and suggested that the PBoC support the exploration of a system. At the same time, at the Lujiazui Forum, Pan Gongsheng, Governor of the People's Bank of China, brought stablecoins into a formal context for the first time, emphasizing their potential to "significantly shorten the cross-border payment chain" and pointing out that digital RMB and stablecoins should have different technical architectures and regulatory paths. In addition, multiple think tanks have also pointed out that both "offshore" and "domestic compliant" RMB stablecoins should be explored simultaneously, promoting "cross-border circulation" and "capital control" in an integrated manner. Based on the publicly available suggestions and policy context, we may speculate that the issuance structure of the RMB stablecoin may be as follows: The central bank will not issue the currency directly, but may establish an SPV (special purpose vehicle) through large state-owned banks or policy financial institutions to lead the issuance, thereby maintaining compliance neutrality and policy controllability; The stablecoin's anchor asset will not be cash or bank demand deposits, but will more likely choose "policy financial instruments" such as central bank bills, MLF (medium-term lending facility) or part of foreign exchange reserves as the underlying assets to meet prudent regulatory requirements; In terms of the custody mechanism, it will tend to be a two-tier system of on-chain + bank account, that is, on-chain issuance and off-chain audit and settlement, and state-owned banks or their subsidiaries will be responsible for asset custody to ensure consistency between accounts and actuals and transparent audits;
The pilot implementation path may give priority to Hong Kong, and conduct license applications and cross-border usage tests within the DTSP framework of the HKMA, and explore extensions to specific domestic scenarios (such as cross-border e-commerce and port settlement) when conditions are ripe;
In terms of scenarios, priority will be given to serving B-end needs such as cross-border payments, corporate clearing and settlement, and public chain RWA projects, rather than the C-end payment market, to avoid overlapping positioning with the digital RMB. This approach is not essentially "technology-first," but rather aims to promote the on-chain expansion of the RMB and the restructuring of its offshore circulation structure within a regulated, auditable, and traceable institutional environment. It does not aim to challenge USDT, but rather to establish a "policy-controllable on-chain payment track," providing institutional tools for the future internationalization of the RMB and the circulation of on-chain assets. What can Chinese Web3 entrepreneurs do? If a RMB stablecoin is truly implemented, its institutional attributes are already determined: it will not be an open-issuance, free-competition entrepreneurial platform, but rather a public infrastructure dominated by the state or the state-owned financial system. Therefore, a more practical approach for Web3 entrepreneurs is to treat the RMB stablecoin as a callable system variable and build real, achievable business models around it. For example: Cross-border settlement tools: Serving as the "payment call layer for the RMB stablecoin." The greatest value of the RMB stablecoin lies in providing a compliant and efficient on-chain settlement option for Chinese companies expanding internationally. Web3 entrepreneurs can build payment APIs, settlement plugins, and fund flow tracking modules on top of it, particularly serving emerging markets such as Southeast Asia, the Middle East, and Latin America, where RMB acceptance is increasing.
Connection interface with real assets: Serving as a bridge component on the RWA side
If the underlying RMB stablecoin is anchored to central bank bills or policy assets (such as MLF), then its interest attributes can be used in the RWA asset portfolio. Web3 entrepreneurs can develop infrastructure around the unpacking of RMB interest rate products, on-chain debt agreements, and income rights mapping tools to provide interfaces for "RMB asset-preferred investors" in overseas markets. Application Scenario Service Providers: Driving the Implementation of RMB Stablecoins Government-led coin issuance generally doesn't equate to government-led application. Whether in B2B cross-border payments, settlement within e-commerce platforms, or overseas education, healthcare, and tourism, the true drivers of RMB stablecoin adoption will likely be local service entrepreneurs who excel at connecting these verticals with Web3 components. This means that the roles of DApp development, Web3 payment aggregation, and consumer wallets will all be reshaped. Risk Management and Compliance Intermediaries: Serving as the "Operational Support Layer for RMB Stablecoins." For cross-border circulation, RMB stablecoins will inevitably face regulatory requirements such as compliance review, fund use tracking, and identity verification. Web3 entrepreneurs can develop on-chain AML/KYC plugins, built-in audit mechanisms for smart contracts, and automated reporting systems for fund paths to complement risk control and data governance, becoming a "technical outsourcing layer" outside the state-owned system. Although RMB stablecoins are still in the policy discussion and research stage, recent regulatory trends and think tank statements indicate that their implementation has been incorporated into national strategic planning and has a certain degree of institutional feasibility. For Web3 entrepreneurs, the opportunity lies not in "issuing coins," but in making early plans for payment, settlement, off-chain integration, and cross-border circulation. If stablecoins become available in the future, service-oriented projects that can provide compliant access points will be more likely to secure resources, policies, and users.
Joy
Hui Xin
YouQuan
Alex
Kikyo