Recent news reports indicate possible restrictions on Chinese companies and financial institutions in Hong Kong regarding stablecoins and cryptocurrencies.
Restrictions on Chinese Companies
According to a report by local news outlet Caixin, mainland Chinese firms operating in Hong Kong may be forced to withdraw from cryptocurrency-related activities. The Hong Kong branches of several state-owned enterprises and Chinese banks are not expected to participate in the race to obtain stablecoin licenses.
Plans for Stablecoin Issuance
Reportedly, financial institutions like HSBC and the Industrial and Commercial Bank of China (ICBC), the world's largest bank by total assets, plan to apply for stablecoin licenses in Hong Kong. However, recent policy shifts could lead these institutions to reconsider their applications.
China's Cautious Approach to Stablecoins
Moreover, restrictions will also be placed on investments by these firms in crypto and crypto exchanges. Concerns from Chinese authorities center around the potential use of stablecoins in fraudulent activities. Nonetheless, the government is considering the introduction of yuan-backed stablecoins to enhance global currency usage.
Thus, while Chinese companies show interest in stablecoins and crypto investments, new restrictions may significantly hinder their participation in this rapidly evolving field.
