China is rethinking its hardline strategy to crypto by carving out room for fiat-referenced stablecoins (FRS) as a device for renminbi (RMB) internationalisation. Whereas the mainland maintains tight capital controls and continues its 2021 ban on crypto buying and selling and mining, Hong Kong is now the managed take a look at mattress, because the jurisdiction rolled out a licensing regime for stablecoin issuers on August 1, 2025.
Whether or not this two-track technique can chip away on the greenback’s dominance in digital cross-border settlement is the query to observe.
Be a part of stablecoin builders this month on the iFX EXPO Asia in Hong Kong.
Mainland Holds the Line, however Alerts a Shift
Beijing’s baseline coverage has not modified: since 2021, the mainland has banned cryptocurrency buying and selling, issuance, and mining, citing dangers to monetary stability and the potential for capital flight. What’s new is that senior policymakers are overtly discussing whether or not yuan-backed stablecoins may very well be utilized in international funds.
In accordance with Reuters, the State Council is reviewing a draft roadmap that might, for the primary time, think about permitting RMB-linked stablecoins, alongside targets for abroad RMB use and a risk-control framework. If authorized, this could mark a notable shift from blanket hostility towards privately issued digital property.
On the identical time, regulators proceed to emphasize the risks: money-laundering and terrorist-financing dangers, anonymity-enabled capital outflows, and the broader menace of destabilising China’s capital account.
In case you’re questioning about cross-border RMB settlement quantity (blue), this has clearly been quickly rising previously few yrs.
Buying and selling (orange) settlement has additionally been more and more settled in RMB as a result of concern that Chinese language monetary system might face SWIFT sanction pic.twitter.com/X2imA2G8cp
— tphuang (@tphuang) October 12, 2025
Hong Kong’s Licensing Push: the Managed Gateway
Hong Kong has turn out to be the launchpad for RMB-linked stablecoins. Its Stablecoins Ordinance (Cap. 656) took impact on 1 August 2025, establishing a complete licensing regime for fiat-referenced stablecoin issuers. Issuing or advertising specified stablecoins to the general public with out authorisation is now a felony offence.
To implement the regulation, the Hong Kong Financial Authority (HKMA) publisheda Supervisory Guideline in July2025, which covers licensing and prudential requirements, together with a devoted AML/CFT Guideline and explanatory supplies on licensing and transitional provisions.
Beneath these guidelines, licensed issuers should, amongst different issues: preserve full 1:1 reserve backing in high-quality, liquid property; assure redemption at par worth inside one enterprise day; segregate consumer property underneath a statutory belief with certified custodians; submit day by day statements and weekly reserve experiences with impartial attestations and annual audit; meet minimal paid-up capital of no less than HK$25 million; and implement strong governance and danger controls.
BREAKING:🚨🚨
Hong Kong Passes Regulation to Regulate Stablecoins, Introduces Licensing for Issuers.
Nation FOMO Begins 🫡🫡 #XRP pic.twitter.com/F5wt7hyoiL
— Xaif Crypto🇮🇳|🇺🇸 (@Xaif_Crypto) Might 22, 2025
Gatekeeping Entry
Cap. 656 makes it clear that not everybody can convey stablecoins to market. From 1 August 2025, providing specified stablecoins is prohibited until you’re a “permitted offeror” – for instance, a licensed issuer or authorised financial institution, as outlined underneath the Ordinance. Unlicensed distributors should stop their actions or pursue an eligible licensing route. This successfully ring-fences early adoption and retains issuance and advertising inside tightly supervised channels.
Id, With out Exception (Virtually Talking)
A headline characteristic is the HKMA’s stringent strategy to buyer identification. The AML/CFT Guideline requires issuers to conduct buyer due diligence (CDD) on every holder of their specified stablecoins and to confirm possession or management of each buyer pockets. Issuers could depend on regulated third events (e.g., banks or licensed VASPs) for CDD.
Jakob Kronbichler, CEO & Co-founder, Clearpool (Picture: LinkedIn)
Peer-to-peer transfers between unhosted wallets of non-customers fall outdoors ongoing monitoring, but issuers should nonetheless monitor total token circulation and related dangers. The trade has flagged adoption frictions right here, particularly for customers who worth flexibility, privateness, and velocity.
“Obligatory verification could really feel like a brake on retail use, however for establishments—the individuals shifting the most important flows—it’s an accelerator. Clear guidelines give counterparties confidence whenever you’re financing funds or extending credit score on-chain,” mentioned Jakob Kronbichler, CEO & Co-founder, Clearpool. “The tweak is to make KYC moveable so a verified credential travels throughout platforms—preserving the system secure whereas eradicating repeated checks that tie up liquidity.”
Konstantinos Chrysikos, Head of CRM at Kudotrade, informed FinanceMagnates.com: “This might foster long-term belief by interesting to establishments and regulators, but it surely goes additional than many jurisdictions. Within the close to time period, such strict checks could restrict adoption, probably driving customers towards markets with lighter guidelines.”
Readers can hear extra from Jakob Kronbichler, in addition to different consultants (Edwin Cheung, International Head of OTC at Gate; Kailash Madan, CCO Triple A; and Esme Pau, Head of Capital Markets at CertiK), who will converse on RMB-linked stablecoins, tokenised credit score, and cross-border settlement on the iFX EXPO Asia in Hong Kong this month.
Early Market Stance
The HKMA has signalled a measured rollout. Because the authority knowledgeable Reuters on July 29, 2025, solely a “handful” of licences might be authorized initially, with the primary batch anticipated in early 2026. Close to-term purposes are more likely to deal with B2B use circumstances reminiscent of commerce settlement, moderately than mass-retail choices.
New Headwinds: Pause on RWA Tokenisation by Chinese language Brokers
Contemporary reporting highlights Beijing’s warning relating to Hong Kong’s growth of digital property. On 23 September 2025, Reuters reported that China’s securities watchdog (CSRC) informally requested some mainland brokerages to pause their real-world asset (RWA) tokenisation companies in Hong Kong, following earlier steerage to rein in analysis endorsing stablecoins.
The HKMA, for its half, states that it’s reviewing the authorized framework for tokenisation (initially specializing in the bond market) and famous that 77 companies had expressed curiosity in stablecoin licences as of August 31. The upshot: enthusiasm is excessive, however coverage danger stays non-trivial, and mainland directions can shortly tighten the spigot.
Exterior Hong Kong: the First Regulated Offshore CNH Stablecoin Launches
On 17 September 2025, fintech AnchorX launched AxCNH, a CNH-pegged stablecoin in Kazakhstan, utilising Conflux and cleared by native regulators; a notable, regulated proof level for RMB-linked tokens outdoors Hong Kong’s regime. The HKMA has individually reiterated that no stablecoin issuers are presently licensed in Hong Kong, and that unlicensed issuance/advertising would breach Cap. 656.
Events Are Ready in Anticipation
Main Chinese language tech teams have explored issuing offshore RMB stablecoins through Hong Kong entities – together with Ant Group – with motivations spanning streamlined commerce finance, quicker settlement, and new income from charges and reserve yields (akin to US issuer Circle). Some experiences have additionally linked JD.com to exploratory work.
Konstantinos Chrysikos, Head of Buyer Relationship Administration at Kudotrade
Brokers are paying consideration, too. In accordance with Chrysikos, mainland shoppers have created a “wave of requests” for the reason that regulation handed, spurring a number of licence purposes within the first weeks of August. Whereas companies are desperate to seize new movement and product alternatives, current mainland steerage – first to keep away from over-promoting stablecoins and now to pause some RWA tokenisation – highlights how delicate the coverage surroundings stays.
What This Might Change (And What It Gained’t—But)
Stablecoins can facilitate quicker, cheaper cross-border funds. Right this moment’s correspondent-banking chains are sluggish and fee-heavy; tokenised money permits extra direct settlement, slicing time and prices. Close to-term adoption is almost definitely in tightly monitored B2B corridors linked to Hong Kong and the Better Bay Space.
“The clearest 2026 impression is cross-border commerce and provider funds—assume Africa → Hong Kong → China,” added Kronbichler. “A CNH stablecoin collapses multi-step conversion into near-instant settlement. For fintechs already shifting remittances and service provider funds in stablecoins, the lacking piece has been matching liquidity. That’s the place Cost Financing (PayFi) is transformative: it makes personal credit score behave like a crypto-native asset—brief cycles, liquid, scalable. The prerequisite is interoperability, so CNH stablecoins plug into present cost and credit score rails.”
They may be the lacking hyperlink for programmable commerce finance: on blockchain rails, sensible contracts can mechanically launch funds when items are delivered or milestones are met, probably that means fewer disputes, much less paperwork, and settlement tied on to efficiency.
Nonetheless, liquidity is decisive. For RMB-linked stablecoins to matter, there should be ample offshore issuance, credible one-to-one redemption, and cooperation from associate jurisdictions. Till these situations mature, the greenback’s deep liquidity and community results will proceed to keep up its lead.
Greenback Dominance and Beijing’s Digital Sovereignty Play
The worldwide stablecoin market stays closely centred on the US greenback. The BIS describes the availability as overwhelmingly dollar-denominated, and Reuters has reported that the USD share exceeds 99%. In the meantime, SWIFT information indicated that the RMB accounted for two.88% of worldwide funds in June 2025, versus the USD’s 47.19%. This entrenched greenback dominance is the backdrop China is attempting to shift.
Hong Kong’s RMB Liquidity Will get New Pipes
Complementing the licensing regime, the PBoC and HKMA unveiled measures in late September to deepen the RMB market plumbing in Hong Kong, together with repo entry for offshore establishments, the growth of Swap Join, increased day by day limits, and steps towards yuan bond futures. These aren’t stablecoin guidelines, however they help the liquidity infrastructure that RMB-linked tokens might finally faucet.
China’s strategy is dual-track: preserve management on the mainland whereas permitting Hong Kong to incubate a tightly supervised, identity-verified stablecoin market that might step by step seed RMB liquidity in digital commerce. The most recent CSRC alerts on RWA tokenisation present how shortly mainland steerage can recalibrate danger urge for food, which can stay an important variable for brokers, tech platforms, and issuers by means of 2026.
China is rethinking its hardline strategy to crypto by carving out room for fiat-referenced stablecoins (FRS) as a device for renminbi (RMB) internationalisation. Whereas the mainland maintains tight capital controls and continues its 2021 ban on crypto buying and selling and mining, Hong Kong is now the managed take a look at mattress, because the jurisdiction rolled out a licensing regime for stablecoin issuers on August 1, 2025.
Whether or not this two-track technique can chip away on the greenback’s dominance in digital cross-border settlement is the query to observe.
Be a part of stablecoin builders this month on the iFX EXPO Asia in Hong Kong.
Mainland Holds the Line, however Alerts a Shift
Beijing’s baseline coverage has not modified: since 2021, the mainland has banned cryptocurrency buying and selling, issuance, and mining, citing dangers to monetary stability and the potential for capital flight. What’s new is that senior policymakers are overtly discussing whether or not yuan-backed stablecoins may very well be utilized in international funds.
In accordance with Reuters, the State Council is reviewing a draft roadmap that might, for the primary time, think about permitting RMB-linked stablecoins, alongside targets for abroad RMB use and a risk-control framework. If authorized, this could mark a notable shift from blanket hostility towards privately issued digital property.
On the identical time, regulators proceed to emphasize the risks: money-laundering and terrorist-financing dangers, anonymity-enabled capital outflows, and the broader menace of destabilising China’s capital account.
In case you’re questioning about cross-border RMB settlement quantity (blue), this has clearly been quickly rising previously few yrs.
Buying and selling (orange) settlement has additionally been more and more settled in RMB as a result of concern that Chinese language monetary system might face SWIFT sanction pic.twitter.com/X2imA2G8cp
— tphuang (@tphuang) October 12, 2025
Hong Kong’s Licensing Push: the Managed Gateway
Hong Kong has turn out to be the launchpad for RMB-linked stablecoins. Its Stablecoins Ordinance (Cap. 656) took impact on 1 August 2025, establishing a complete licensing regime for fiat-referenced stablecoin issuers. Issuing or advertising specified stablecoins to the general public with out authorisation is now a felony offence.
To implement the regulation, the Hong Kong Financial Authority (HKMA) publisheda Supervisory Guideline in July2025, which covers licensing and prudential requirements, together with a devoted AML/CFT Guideline and explanatory supplies on licensing and transitional provisions.
Beneath these guidelines, licensed issuers should, amongst different issues: preserve full 1:1 reserve backing in high-quality, liquid property; assure redemption at par worth inside one enterprise day; segregate consumer property underneath a statutory belief with certified custodians; submit day by day statements and weekly reserve experiences with impartial attestations and annual audit; meet minimal paid-up capital of no less than HK$25 million; and implement strong governance and danger controls.
BREAKING:🚨🚨
Hong Kong Passes Regulation to Regulate Stablecoins, Introduces Licensing for Issuers.
Nation FOMO Begins 🫡🫡 #XRP pic.twitter.com/F5wt7hyoiL
— Xaif Crypto🇮🇳|🇺🇸 (@Xaif_Crypto) Might 22, 2025
Gatekeeping Entry
Cap. 656 makes it clear that not everybody can convey stablecoins to market. From 1 August 2025, providing specified stablecoins is prohibited until you’re a “permitted offeror” – for instance, a licensed issuer or authorised financial institution, as outlined underneath the Ordinance. Unlicensed distributors should stop their actions or pursue an eligible licensing route. This successfully ring-fences early adoption and retains issuance and advertising inside tightly supervised channels.
Id, With out Exception (Virtually Talking)
A headline characteristic is the HKMA’s stringent strategy to buyer identification. The AML/CFT Guideline requires issuers to conduct buyer due diligence (CDD) on every holder of their specified stablecoins and to confirm possession or management of each buyer pockets. Issuers could depend on regulated third events (e.g., banks or licensed VASPs) for CDD.
Jakob Kronbichler, CEO & Co-founder, Clearpool (Picture: LinkedIn)
Peer-to-peer transfers between unhosted wallets of non-customers fall outdoors ongoing monitoring, but issuers should nonetheless monitor total token circulation and related dangers. The trade has flagged adoption frictions right here, particularly for customers who worth flexibility, privateness, and velocity.
“Obligatory verification could really feel like a brake on retail use, however for establishments—the individuals shifting the most important flows—it’s an accelerator. Clear guidelines give counterparties confidence whenever you’re financing funds or extending credit score on-chain,” mentioned Jakob Kronbichler, CEO & Co-founder, Clearpool. “The tweak is to make KYC moveable so a verified credential travels throughout platforms—preserving the system secure whereas eradicating repeated checks that tie up liquidity.”
Konstantinos Chrysikos, Head of CRM at Kudotrade, informed FinanceMagnates.com: “This might foster long-term belief by interesting to establishments and regulators, but it surely goes additional than many jurisdictions. Within the close to time period, such strict checks could restrict adoption, probably driving customers towards markets with lighter guidelines.”
Readers can hear extra from Jakob Kronbichler, in addition to different consultants (Edwin Cheung, International Head of OTC at Gate; Kailash Madan, CCO Triple A; and Esme Pau, Head of Capital Markets at CertiK), who will converse on RMB-linked stablecoins, tokenised credit score, and cross-border settlement on the iFX EXPO Asia in Hong Kong this month.
Early Market Stance
The HKMA has signalled a measured rollout. Because the authority knowledgeable Reuters on July 29, 2025, solely a “handful” of licences might be authorized initially, with the primary batch anticipated in early 2026. Close to-term purposes are more likely to deal with B2B use circumstances reminiscent of commerce settlement, moderately than mass-retail choices.
New Headwinds: Pause on RWA Tokenisation by Chinese language Brokers
Contemporary reporting highlights Beijing’s warning relating to Hong Kong’s growth of digital property. On 23 September 2025, Reuters reported that China’s securities watchdog (CSRC) informally requested some mainland brokerages to pause their real-world asset (RWA) tokenisation companies in Hong Kong, following earlier steerage to rein in analysis endorsing stablecoins.
The HKMA, for its half, states that it’s reviewing the authorized framework for tokenisation (initially specializing in the bond market) and famous that 77 companies had expressed curiosity in stablecoin licences as of August 31. The upshot: enthusiasm is excessive, however coverage danger stays non-trivial, and mainland directions can shortly tighten the spigot.
Exterior Hong Kong: the First Regulated Offshore CNH Stablecoin Launches
On 17 September 2025, fintech AnchorX launched AxCNH, a CNH-pegged stablecoin in Kazakhstan, utilising Conflux and cleared by native regulators; a notable, regulated proof level for RMB-linked tokens outdoors Hong Kong’s regime. The HKMA has individually reiterated that no stablecoin issuers are presently licensed in Hong Kong, and that unlicensed issuance/advertising would breach Cap. 656.
Events Are Ready in Anticipation
Main Chinese language tech teams have explored issuing offshore RMB stablecoins through Hong Kong entities – together with Ant Group – with motivations spanning streamlined commerce finance, quicker settlement, and new income from charges and reserve yields (akin to US issuer Circle). Some experiences have additionally linked JD.com to exploratory work.
Konstantinos Chrysikos, Head of Buyer Relationship Administration at Kudotrade
Brokers are paying consideration, too. In accordance with Chrysikos, mainland shoppers have created a “wave of requests” for the reason that regulation handed, spurring a number of licence purposes within the first weeks of August. Whereas companies are desperate to seize new movement and product alternatives, current mainland steerage – first to keep away from over-promoting stablecoins and now to pause some RWA tokenisation – highlights how delicate the coverage surroundings stays.
What This Might Change (And What It Gained’t—But)
Stablecoins can facilitate quicker, cheaper cross-border funds. Right this moment’s correspondent-banking chains are sluggish and fee-heavy; tokenised money permits extra direct settlement, slicing time and prices. Close to-term adoption is almost definitely in tightly monitored B2B corridors linked to Hong Kong and the Better Bay Space.
“The clearest 2026 impression is cross-border commerce and provider funds—assume Africa → Hong Kong → China,” added Kronbichler. “A CNH stablecoin collapses multi-step conversion into near-instant settlement. For fintechs already shifting remittances and service provider funds in stablecoins, the lacking piece has been matching liquidity. That’s the place Cost Financing (PayFi) is transformative: it makes personal credit score behave like a crypto-native asset—brief cycles, liquid, scalable. The prerequisite is interoperability, so CNH stablecoins plug into present cost and credit score rails.”
They may be the lacking hyperlink for programmable commerce finance: on blockchain rails, sensible contracts can mechanically launch funds when items are delivered or milestones are met, probably that means fewer disputes, much less paperwork, and settlement tied on to efficiency.
Nonetheless, liquidity is decisive. For RMB-linked stablecoins to matter, there should be ample offshore issuance, credible one-to-one redemption, and cooperation from associate jurisdictions. Till these situations mature, the greenback’s deep liquidity and community results will proceed to keep up its lead.
Greenback Dominance and Beijing’s Digital Sovereignty Play
The worldwide stablecoin market stays closely centred on the US greenback. The BIS describes the availability as overwhelmingly dollar-denominated, and Reuters has reported that the USD share exceeds 99%. In the meantime, SWIFT information indicated that the RMB accounted for two.88% of worldwide funds in June 2025, versus the USD’s 47.19%. This entrenched greenback dominance is the backdrop China is attempting to shift.
Hong Kong’s RMB Liquidity Will get New Pipes
Complementing the licensing regime, the PBoC and HKMA unveiled measures in late September to deepen the RMB market plumbing in Hong Kong, together with repo entry for offshore establishments, the growth of Swap Join, increased day by day limits, and steps towards yuan bond futures. These aren’t stablecoin guidelines, however they help the liquidity infrastructure that RMB-linked tokens might finally faucet.
China’s strategy is dual-track: preserve management on the mainland whereas permitting Hong Kong to incubate a tightly supervised, identity-verified stablecoin market that might step by step seed RMB liquidity in digital commerce. The most recent CSRC alerts on RWA tokenisation present how shortly mainland steerage can recalibrate danger urge for food, which can stay an important variable for brokers, tech platforms, and issuers by means of 2026.
