Media365
Beijing’s explicit denunciation of stablecoins as a financial risk has cast fresh doubt on Hong Kong’s ambitions to become a regulated hub for the asset class, according to legal experts and analysts.
The People’s Bank of China (PBOC) – together with the public security ministry, the cyberspace administration, the top court and other key financial regulators – said in a statement on Saturday that stablecoins did not meet the mainland’s requirements on customer identification and anti-money-laundering.
They also warned that such tokens carried significant risks of fraud, money laundering and illegal cross-border capital flows.
It was the first time mainland authorities had publicly singled out stablecoins – a form of cryptocurrency pegged to a fiat currency and designed to maintain a stable value – as they gain traction in payments.
By declaring dealings in cryptocurrencies, including stablecoins, to be “illegal financial activities”, Beijing has dashed expectations that it might soften its long-running crackdown.
That shift in tone could weigh on Hong Kong’s efforts to position itself as a hub for virtual assets, including cryptocurrencies and stablecoins, analysts said.
