Home / Business and Economy / China Crushes Hong Kong's Stablecoin Dreams
China Crushes Hong Kong's Stablecoin Dreams
1 Dec
Summary
- China's central bank declared stablecoins illegal under the crypto ban.
- Hong Kong's stablecoin ambitions are significantly hampered.
- Crypto stocks in Hong Kong saw a notable decline following the announcement.
Hong Kong's recent efforts to establish a regulated stablecoin market have faced a major setback following a decisive statement from Beijing.
The People's Bank of China reiterated that stablecoins are considered illegal within China's broader cryptocurrency prohibition. This declaration directly undermines Hong Kong's strategic aim to leverage its new stablecoin framework as a gateway to the mainland market, despite previous positive signals.
Following the central bank's pronouncement, Hong Kong's crypto-related stocks registered a sharp decline when trading opened on Monday. This event highlights the ongoing tension between Hong Kong's regulatory ambitions and mainland China's stringent digital asset policies, creating a significant challenge for the territory's crypto sector.
