China Stablecoin Regulation: Hong Kong Licensing Vs Mainland Guardrails

Hong Kong's new stablecoin licensing regime, effective August 1, contrasts sharply with mainland China's tightening stance. The Hong Kong Monetary Authority mandates issuers to hold HK$25 million in capital, maintain segregated reserves, and adhere to anti-money laundering standards—though no licenses have been granted yet. Meanwhile, Beijing prioritizes digital yuan pilots and restricts crypto exposure, cracking down on Tether-linked transfers and banning direct corporate holdings.

Emil Chan of the Hong Kong Digital Finance Association highlights the broader challenge: China's conservative financial culture. Hong Kong pairs its stablecoin rules with ambitious tokenization efforts, including the world's first real-world asset registry launched August 7. "It puts Hong Kong ahead of almost any other Asian jurisdiction," says Animoca Brands' Yat Siu, suggesting the framework could become a regional blueprint.

Private sector momentum builds as HSBC adopts blockchain settlements, signaling institutional traction. The divide underscores China's dilemma: promoting yuan internationalization while maintaining capital controls. Hong Kong's compromise—regulated innovation within a controlled corridor—may offer a path forward.