Hong Kong warns against unapproved yuan stablecoins amid crypto frenzy

The Hong Kong Monetary Authority (HKMA) cautioned investors that no stablecoins pegged to the offshore yuan had been approved for issuance in the city, as regulators sought to temper the frenzy surrounding digital assets.

In a statement published on WeChat on Wednesday, the HKMA refuted claims circulating on social media that the first offshore yuan-pegged stablecoin had been issued in Hong Kong.

The authority said it had not granted any licences for stablecoin issuers and deemed any related issuance or marketing activities illegal. Investors were urged to remain vigilant.

Hong Kong's new regulatory regime for stablecoin issuers, which took effect in August, imposes stringent requirements on companies aiming to grab a share of the rapidly expanding market.

Stablecoins are cryptocurrency tokens designed to maintain a stable value linked to fiat currencies, such as the US dollar or the Hong Kong dollar. Initially used by crypto traders to quickly move their capital across different tokens and platforms, stablecoins have gained traction for their potential to improve the efficiency of cross-border payments.

Experts are advocating for Beijing to advance the development of stablecoins pegged to the offshore yuan, saying this could facilitate global adoption of the Chinese currency and strengthen Hong Kong's position as an international financial centre.

Last week, Hong Kong-based company AnchorX - which said it held a stablecoin licence from the Astana Financial Services Authority in Kazakhstan - launched an offshore yuan stablecoin, AxCNH. It was intended to facilitate cross-border payments and settlements for offshore Chinese enterprises and countries involved in the Belt and Road Initiative, the company said.

AnchorX also said it planned to explore the use of AxCNH in digital-asset trading and real-world asset (RWA) tokenisation.

The surge in interest in stablecoins and RWA tokenisation has fuelled a market boom in digital assets in Hong Kong, marked by a proliferation of RWA projects and rising share prices for companies launching digital-asset initiatives.

Amid the fervour, the China Securities Regulatory Commission, the mainland's securities watchdog, was said to have advised some local brokerages to pause their tokenisation activities in Hong Kong in an effort to strengthen risk management.

The city saw a recent "pullback" in initiatives aimed at integrating crypto with traditional finance, as industry participants "rushed to launch crypto projects and narratives without building out the necessary infrastructure", said Augustine Fan, head of insights at local digital-asset trading firm SignalPlus.

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Regulators wanted companies to focus on the "real-world economic applications of new technology" rather than activities that merely leveraged "a hot trend", he added.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2025 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2025. South China Morning Post Publishers Ltd. All rights reserved.

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