- Hong Kong’s Stablecoin Bill takes effect August 1, with strict licensing requirements for RMB-backed stablecoin issuers.
- JD.com and Ant Group lead RMB stablecoin plans, aligning with Beijing’s push for offshore RMB internationalization.
- Experts see stablecoins aiding trade settlement, but trust issues and geopolitical risks could slow RMB adoption globally.
An offshore renminbi (RMB) stablecoin is advancing rapidly as Hong Kong implements its new stablecoin ordinance. This comes as Chinese tech firms like JD.com and Ant Group are lobbying to issue a CNH-backed stablecoin from the city.
The Hong Kong Legislative Council passed its Stablecoin Bill on May 21, with the law officially taking effect on August 1. The HKMA will now license issuers under strict requirements, including full reserve backing and anti-money laundering compliance. While over 40 firms have applied, officials have signaled that only a limited number of licenses will be granted initially.
Experts view a CNH stablecoin as part of China’s dual-track strategy: advancing the digital yuan domestically while promoting the RMB’s use offshore. Former PBoC Governor Zhou Xiaochuan previously warned that the growth of U.S. dollar stablecoins risks reinforcing dollar dominance, urging China to respond through controlled pilots.
Ant Group plans to seek licenses in Hong Kong, Singapore, and Luxembourg, while JD.com has announced plans for a Hong Kong dollar-pegged stablecoin targeting business and consumer payments. These moves align with China’s broader effort to leverage Hong Kong as a testing ground for regulated digital finance.
Expert Insights on RMB Stablecoin Development
Morgan Stanley noted that stablecoins could complement existing RMB settlement infrastructure, including the Cross-Border Interbank Payment System (CIPS).
Related: China’s Tech Giants Want a Yuan-Backed Stablecoin; Now, Its Regulators Are Listening
Industry leaders such as HashKey’s Xiao Feng argue that Hong Kong’s framework could support RMB stablecoins in cross-border trade and supply chain payments. These applications may help build adoption in emerging markets closely tied to Chinese trade.
Direct Challenge to US Dollar Stablecoin Dominance
However, significant hurdles remain. Global trust in the RMB lags behind the dollar due to capital controls and economic concerns.
Additionally, geopolitical tensions may affect acceptance, particularly in jurisdictions aligned with the U.S. Still, experts believe Hong Kong’s regulatory clarity and cross-border focus could lay groundwork for gradual expansion.
Related: Trump’s July 30 Crypto Report to Back Stablecoins, Rejects CBDCs, Eyes Bitcoin Reserve
Still, experts believe Hong Kong’s regulatory clarity provides a strong foundation. For crypto traders, the launch of a major, regulated CNH stablecoin could create new arbitrage opportunities and introduce a significant new competitor to the long-standing dominance of USDT and USDC.
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