September 15, 2025
By Anjali Kochhar
Chinese regulators are preparing to limit the participation of mainland state-owned enterprises, banks, and tech giants in stablecoin and broader cryptocurrency initiatives in Hong Kong, according to recent reports.
Sources speaking to Caixin say that these restrictions will affect mainland Chinese institutions operating in Hong Kong, including branches of state-owned enterprises and large banks, many of which had been considering applying for Hong Kong’s new stablecoin licenses. This development comes shortly after the implementation of Hong Kong’s stablecoin regulatory framework on August 1, 2025.
The rules included a six-month transition period during which firms interested in entering the stablecoin space could apply. More than 70 entities had expressed interest. Among these were major institutions such as HSBC and the Industrial and Commercial Bank of China (ICBC). However, due to the new restrictions, many are now expected to step back from applying.
An anonymous industry executive told Caixin that Hong Kong’s stablecoin initiatives remain in their early stages. “Hong Kong’s stablecoin business is just beginning, and its future direction is unclear,” the executive said. They added that it would not be prudent for major institutions to rush into participation.
Several Chinese firms had already started exploring this area. A subsidiary of China Merchants Bank launched a Hong Kong-based institutional crypto exchange earlier this year. E-commerce leader JD.com and Ant International also registered entities tied to stablecoin rollouts in Hong Kong and Singapore shortly before the regulatory framework took effect.
Reports suggest that authorities may extend restrictions beyond stablecoin issuance to cover broader crypto investments and services. Mainland companies could also be prohibited from conducting research or hosting seminars related to stablecoins, due to concerns around fraud and financial risk transfer.
At the same time, there are indications that China is not dismissing stablecoins entirely. Officials are reportedly exploring regulated yuan-backed stablecoins intended for international transactions. In late August, state-asset regulators discussed strategic responses to digital currencies and stablecoins. One example is Conflux, which recently launched a stablecoin backed by the offshore yuan for use in Belt and Road countries, but explicitly banned within mainland China.
Meanwhile, Hong Kong regulators may consider easing capital requirements for banks engaging with crypto. The move would aim to support compliant stablecoin adoption and encourage broader integration of digital assets using public blockchains.
About the author
Anjali Kochhar covers cryptocurrency and blockchain stories in India as well as globally. Having been in the field of media and journalism for over four years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.
