China puts brakes on private stablecoins

"Corporate issuance of currency is inappropriate"

Japan to allow banks to hold cryptocurrencies

Alibaba, JD.com and other major Chinese big tech firms have halted plans to issue stablecoins. The Chinese government put the brakes on them, saying it is inappropriate for private companies to be involved in issuing currency.

On the 19th, the Financial Times (FT) reported that the People's Bank of China and the Cyberspace Administration of China recently instructed Ant Group, an Alibaba affiliate, and e-commerce firm JD.com to "temporarily suspend stablecoin-related businesses." As a result, both companies suspended participation in the Hong Kong Monetary Authority's (HKMA) pilot stablecoin program and plans to issue tokenized bonds.

According to several sources, the People's Bank of China reportedly expressed caution, saying "it is not desirable for private technology companies to issue currency in any form." One official said, "stablecoins issued by the private sector are perceived as a challenge to the central bank digital currency (e-CNY)."

Last August, the HKMA began accepting applications from stablecoin issuers, positioning itself a step ahead of the Chinese mainland as a 'testing ground.' However, Zhou Xiaochuan, former governor of the People's Bank of China, warned that "if stablecoins are misused as tools for asset speculation, they can lead to financial fraud and systemic instability," and that "real demand must be closely examined," prompting regulators to take a more conservative stance.

By contrast, Japan is strengthening a pro-cryptocurrency policy stance. Japan's Financial Services Agency is considering regulatory changes to allow banks to hold cryptocurrencies, including Bitcoin, for investment purposes. It plans to allow cryptocurrencies to be traded like stocks and bonds in the future.

Reporter Hye-in Lee hey@hankyung.com