China Explores RMB-Backed Stablecoins via Hong Kong as Crypto Policy Evolves

China is testing a dual-track approach to cryptocurrency regulation, maintaining its mainland ban while allowing Hong Kong to pioneer yuan-linked stablecoin development. The special administrative region's new licensing regime for issuers, effective August 2025, positions Hong Kong as a controlled sandbox for RMB internationalization through digital assets.

Senior policymakers are reportedly reviewing plans to leverage private stablecoins in cross-border payments—a stark contrast to Beijing's 2021 blanket prohibition on crypto trading and mining. The proposed framework would introduce risk controls alongside targets for offshore RMB usage, potentially creating corridors between regulated stablecoins and traditional finance.

This strategic pivot comes as global trade increasingly demands dollar alternatives. While regulators continue warning of money laundering risks, the MOVE signals recognition of stablecoins' potential to reshape settlement infrastructure. The iFX EXPO Asia in Hong Kong will serve as a key forum for builders navigating this emerging landscape.