China’s major technology firms, including JD.com and Ant Group, have reportedly suspended their intentions to issue stablecoins amid rising regulatory scrutiny. These companies had expressed interest in engaging with Hong Kong’s pilot stablecoin initiative and exploring virtual asset-backed products, such as tokenized bonds. However, recent reports indicate that key regulatory bodies, particularly the People’s Bank of China (PBoC) and the Cyberspace Administration of China (CAC), have advised these firms to halt their plans.
Sources familiar with the matter indicated that PBoC officials raised concerns about allowing technology firms and brokerages to create their own currency. This caution stems from fears regarding the potential implications of stablecoins on the central bank’s own digital currency project, the e-CNY. A source familiar with the PBoC’s stance noted that the introduction of privately managed stablecoins could present challenges to the central bank’s authority over currency issuance, raising critical questions about the ultimate control over coinage—whether it resides with the central bank or private companies.
This regulatory pushback highlights a broader trend among global regulators seeking to manage the emergence of stablecoins, digital assets typically pegged to established currencies like the U.S. dollar. In the U.S., the administration is promoting stablecoins as a significant component of the financial ecosystem and a means to maintain the dollar’s global dominance. Similarly, the European Central Bank has expressed concerns that the rise of dollar-denominated stablecoins could hinder its capacity to implement effective monetary policy.
In a recent analysis published by PYMNTS, the importance of design, disclosure, and market depth was emphasized as critical to the stability of digital assets. While a stablecoin may function effectively from a mechanical standpoint, it must also possess sufficient liquidity and a broad reach to facilitate significant transactions and settlement operations. Established stablecoins such as those from Circle and Tether benefit from extensive order books and an expansive network, allowing them to move large sums with minimal slippage.
Tanner Taddeo, CEO of Stable Sea, highlighted the advantages of stablecoins in facilitating rapid cross-border transactions. He noted that transferring amounts between $10 million and $30 million through traditional means could take three to five business days, while stablecoin transactions could be completed in four to eight hours. Taddeo asserted that “every business has a stablecoin use case,” whether for internal payroll, contractor payments, or access to capital markets, suggesting that companies should proactively explore pilot programs in this emerging area.
