- Main event, leadership changes, market impact, financial shifts, or expert insights.
- China backs Hong Kong’s stablecoin rules framework.
- Emphasis on code-level compliance and third-party audits introduced.
China has endorsed a new regulatory framework for stablecoin issuers in Hong Kong, emphasizing code-level compliance, effective from August 1, 2025.
The policy marks a significant regulatory shift, potentially enhancing cross-border payments and influencing stablecoin infrastructure dynamics with Chinese backing.
The People’s Republic of China has shown support for Hong Kong’s newly established stablecoin regulatory framework that mandates “code-level compliance” and includes “third-party audits.” This move represents a pivotal shift from China’s earlier caution regarding privately-issued cryptoassets.
Key players in this regulatory change include the Hong Kong Monetary Authority (HKMA), with guidance from the People’s Bank of China (PBOC). Mainland e-commerce giants JD.com and AliBaba are participating in regulatory sandbox environments aimed at stablecoin issuance.
The immediate effects of this regime can be observed in the business sector, notably in commerce-related payments. The new rules are set to influence fiat-backed stablecoins, impacting their issuance and management under this regulatory framework.
Financial implications are significant, with over 40 firms, including some prominent tech corporations, seeking licenses in Hong Kong. On a political level, the move signals China’s increasing openness to digital currencies under controlled environments. Pan Gongsheng, Governor of the People’s Bank of China, remarked, “Stablecoins have the potential to facilitate cross-border payments and could help shape the future of the financial system.”
Regulation might influence stablecoin usage both domestically and internationally by promoting programmable features. The integration of such features was previously tested in China’s e-CNY pilot, which set a precedent for restricted digital currency use.
