Ant and JD suspend stablecoin plans: strategic adjustments under regulatory guidance!

As Hong Kong's cryptocurrency policies continue to open up, mainland enterprises' stablecoin strategies are undergoing shifts. Reports indicate that leading firms including Ant Group and JD.com have suspended stablecoin projects, primarily due to explicit regulatory directives from mainland authorities instructing them ‘not to proceed’. Market analysis suggests the suspension stems from a potential strategic conflict between renminbi-pegged stablecoins and the digital renminbi (e-CNY). Regulators are exercising prudent oversight over enterprise-led stablecoin initiatives to safeguard financial stability and ensure the smooth rollout of the official digital currency.

In recent years, following the introduction of its Virtual Asset Service Providers licensing regime, Hong Kong has consistently signalled openness towards the crypto industry, attracting both domestic and international institutions to establish operations. As a key bridge between traditional finance and crypto markets, stablecoins—with their value stability and efficient payment capabilities—have become a crucial entry point for enterprises entering the crypto space. Ant Group and JD.com, leveraging their technological and application ecosystem advantages, had previously garnered market optimism for their RMB-pegged stablecoin development and applications, which were expected to rapidly materialise through existing ecosystems.

However, mainland regulators have consistently maintained a cautious stance, and this explicit suspension is not coincidental. The core contradiction lies in the strategic conflict between RMB-pegged stablecoins and the digital renminbi: As a legal tender digital currency, the digital renminbi is fundamentally positioned to partially replace cash, enhance the payment system, and fulfil missions including financial inclusion, facilitating cross-border payments, and safeguarding monetary sovereignty. Conversely, enterprise-led renminbi-pegged stablecoins constitute private digital currencies. Their large-scale adoption could divert circulation scenarios from the digital renminbi, disrupt its rollout, and potentially undermine financial stability and monetary policy effectiveness.

Moreover, inherent risks within stablecoins themselves constitute a key regulatory concern. Historically, certain stablecoins have experienced de-pegging crises, triggering market volatility and exposing shortcomings in reserve management and risk prevention. Given the vast user bases and business ecosystems of Ant Group and JD.com, any risks arising from their stablecoins could rapidly propagate to traditional finance and the real economy, potentially triggering systemic risks. Amidst the current complex global financial landscape and inconsistent regulatory standards for cryptocurrencies, authorities' stringent oversight of corporate stablecoin projects underscores the core objective of ‘preventing and defusing major financial risks.’

This suspension also sends a clear regulatory signal to the market: mainland China's virtual asset policy has clear boundaries, steadfastly adhering to the principle of ‘serving the real economy and preventing financial risks,’ while prioritising the preservation of the core status of legal tender digital currencies. For enterprises, this does not signify an end to their crypto sector布局, but rather a shift towards compliance within the regulatory framework. Future efforts may focus on areas such as technological R&D and compliance services, avoiding the core territory of legal tender digital currencies.

Regarding industry impact, this may temporarily slow the marketisation of renminbi-pegged stablecoins. However, it will ultimately benefit the standardisation of the cryptocurrency market and foster a favourable environment for the digital renminbi's rollout. This aligns with the global trend of major economies adopting a prudent regulatory approach towards stablecoins, with most jurisdictions emphasising that stablecoins must comply with anti-money laundering, counter-terrorist financing, and financial stability requirements.