Beijing Cracks Down on Stablecoins as Hong Kong Advances

Key Takeaways:

• Beijing orders halt to stablecoin promotion to curb speculation and scams.
• Shenzhen warns residents against fraudulent stablecoin schemes.
• Hong Kong advances issuer rules despite mainland restrictions.

Beijing Tightens Stablecoin Restrictions Amid Fraud Concerns

Chinese regulators have directed the leading domestic brokerage firms and research organizations to cease the promotion of stablecoins and to cancel any related activities or publications. Bloomberg quoted that the instructions were addressed to various parties between the end of July and the beginning of August and represented Beijing’s move to control the retail market of speculation and the fraudulent cases that may be caused by the tokens that are tied to the U.S. dollar.

Beijing moves to curb stablecoin hype even as Hong Kong advances issuer regime https://t.co/f73LJ323Jx

— The Block (@TheBlock__) August 8, 2025

Stablecoins are usually assets backed by cash and short-term U.S. Treasurys that are the most widely used for settlement in the crypto market and, furthermore, for cross-border payments. Officials are on the same page that the use of stablecoins can positively impact international finance, but mainland authorities are still questioning the potential of these instruments, especially for illegal fundraising and market hype.

Most recently, the new order comes after a series of escalated warnings throughout⁰ China, among them is an emergency announcement from Shenzhen officials in July about scams. They correspond to a more general effort of the People’s Bank of China to continue the digital asset’s situation under the strictest control and, at the same time, to develop the application of e-CNY, which is the central bank’s digital currency.

Hong Kong Pushes Forward with Stablecoin Framework

Even though the mainland has given restrictions, Hong Kong is still on its way to become a stablecoin-issuer regulatory regime while at the same time advancing its position as a global hub for digital assets. By exercising under the “One Country, Two Systems” principle, Hong Kong has more freedom in making financial rules for itself which helps the city attract fintech and blockchain innovators.

Meanwhile, crypto activity in mainland⁶ China has not vanished. Over-the-counter trading remains active, with Chainalysis estimating $75 billion in OTC flows in the first nine months of 2024, showing continued demand for crypto despite the official ban.

In contrast, the United States has embraced a regulatory approach. President Donald⁹ Trump recently signed the GENIUS Act, America’s first federal stablecoin legislation, signaling support for the sector rather than restriction.

Summary

Beijing is cracking down on stablecoin promotion to control¹ speculation and fraud, while Hong Kong pushes ahead with a regulatory framework to foster its digital asset industry. Despite bans, mainland OTC activity remains strong, highlighting the ongoing demand for crypto in China.

Also Read: Trump Order Opens 401(k)s to Crypto and Private Markets

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