Beijing Reasserts Control Over Digital Currency Issuance

China has reportedly stepped in to halt stablecoin initiatives by Ant Group and JD.com in Hong Kong, reigniting the debate over who holds the “right of coinage” in the world’s second-largest economy.

The intervention underscores Beijing’s tightening grip over the digital currency landscape — just as Hong Kong was emerging as a testing ground for yuan-linked stablecoins and tokenized financial assets.

According to the Financial Times, both tech giants have been instructed by the People’s Bank of China (PBoC) and the Cyberspace Administration of China (CAC) to pause their stablecoin projects. The directive reflects Beijing’s discomfort with private companies issuing their own digital currencies, a move that could weaken the state's control over monetary authority and corporate-led financial innovation.

One source familiar with the situation told Financial Times

“The real regulatory concern is who has the ultimate right of coinage — the central bank or any private companies on the market.”

Earlier this year, Hong Kong appeared poised to become the experimental hub for stablecoins in the region. The city’s financial regulators opened applications for stablecoin issuers in August, positioning it as a bridge between traditional finance and Web3 innovation.

Mainland officials initially viewed the move positively, seeing it as an opportunity to promote renminbi (RMB)-pegged stablecoins that could extend the yuan’s influence in global trade and cross-border payments. For a moment, it looked like Beijing was strategically leveraging Hong Kong’s autonomy to test digital finance models that complemented China’s own digital yuan (e-CNY) project.

But optimism was short-lived. Ye Zhiheng, Executive Director of the Intermediaries Division at the Hong Kong Securities and Futures Commission (SFC), warned that the city’s stablecoin framework — while well-intentioned — also increased the risk of fraud and market manipulation. His remarks triggered regulatory caution and immediately cooled momentum within Hong Kong’s stablecoin pilot program.

Soon after, the PBoC and CAC reportedly instructed major tech firms, including Ant Group and JD.com, to suspend their involvement in any stablecoin or tokenization efforts tied to Hong Kong’s regulatory sandbox.

Reasserting Monetary Sovereignty

The clampdown didn’t stop with stablecoins. In September, China’s securities watchdog also ordered local brokerages to pause real-world asset (RWA) tokenization activities in Hong Kong — signaling Beijing’s broader unease with offshore digital asset experimentation that could slip beyond its control.

Ironically, this came just as CMB International Asset Management, a Hong Kong-based arm of China Merchants Bank, successfully tokenized a $3.8 billion money market fund on BNB Chain — one of the largest tokenization efforts by a traditional financial institution in Asia.

The latest intervention makes clear that China’s leadership intends to keep the issuance and control of digital currencies firmly within the state apparatus. While Hong Kong’s Web3-friendly environment had briefly served as a proxy sandbox for financial innovation, Beijing’s move signals a return to centralization — prioritizing monetary sovereignty over corporate-led innovation.

With Ant Group and JD.com now sidelined, China’s stablecoin future may once again hinge solely on the e-CNY, the state-backed digital yuan that remains under the tight supervision of the PBoC.