- Hong Kong advances a distinct regulatory regime, licensing stablecoin issuers to boost its profile as a digital asset hub.
- The U.S. has embraced a different path, enacting the GENIUS Act to formally regulate stablecoins at the federal level.
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Chinese financial authorities have reportedly ordered domestic brokerages and research institutions to halt the promotion of stablecoins, asking them to cancel seminars and refrain from publishing any related research.
This move, which took place in late July and early August, is part of a broader effort by Beijing to curb speculative behavior and fraudulent schemes associated with dollar-pegged digital tokens, according to sources cited by Bloomberg.
While regulators have acknowledged the utility of stablecoins in cross-border finance, they remain wary of their unchecked growth within China's borders.
Officials have expressed concerns that stablecoins, typically backed by fiat reserves and U.S. Treasurys, could be repurposed for unauthorized fundraising or other illicit activity, particularly in the absence of clear oversight.
Local governments had already issued warnings earlier this summer.
In early July, Shenzhen authorities flagged a rise in scams falsely marketed as stablecoin investment opportunities, prompting renewed caution among retail investors.
Despite China's nationwide ban on most cryptocurrency operations, digital asset activity persists in less formal channels.
Over-the-counter trading remains active, with analytics firm Chainalysis estimating approximately $75 billion in such flows during the first three quarters of 2024.
The regulatory messaging from Beijing comes as it advances its own digital currency agenda.
The People's Bank of China has launched an international operations center for the digital yuan (e-CNY) in Shanghai, signaling ambitions to expand the state-backed digital currency into global financial corridors.
In contrast to Beijing's restrictive posture, Hong Kong continues to pursue an independent regulatory framework that includes licensing stablecoin issuers, part of its strategy to establish itself as a global crypto hub within its separate legal system.
Meanwhile, in the U.S., stablecoins are gaining institutional acceptance.
In July, President Donald Trump signed the GENIUS Act, the country's first comprehensive stablecoin legislation, reflecting Washington's preference to regulate rather than restrict.
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