Hong Kong Raises Red Flag on Unlicensed Yuan-Stablecoins

Hong Kong’s financial watchdogs have urged investors to exercise caution around yuan-pegged stablecoins, warning that no licenses have been issued under the city’s new Stablecoin Ordinance.

According to the South China Morning Post, the Hong Kong Monetary Authority (HKMA) reiterated that it has not approved any yuan-backed stablecoins, despite claims circulating online. In a WeChat statement, the regulator denied rumors of any officially licensed issuers.

The warning comes shortly after AnchorX, a Hong Kong-based firm, launched AxCNH, an offshore stablecoin pegged to the Chinese yuan. Although HKMA has not granted any licenses, AnchorX says it holds approval from Kazakhstan’s Astana Financial Services Authority. AxCNH aims to streamline cross-border payments for Chinese companies and Belt and Road partners, with plans in digital asset trading and real-world asset (RWA) tokenization.

Authorities have previously indicated that stablecoin licenses are unlikely to be issued this year, despite strong market interest. More than 77 institutions, including state-owned giants like China National Petroleum Corporation and the Bank of China, have expressed intent to apply. PetroChina is particularly interested in using stablecoins to settle oil and gas trade.

The surge in demand has fueled a digital asset boom in Hong Kong, with rising stock prices and expanding RWA initiatives. However, the China Securities Regulatory Commission (CSRC) has recently ordered some brokerages to halt tokenization activities, and the Securities and Futures Commission (SFC) warned of increased fraud risks following the new ordinance.

Image Credit: Pixabay

Post Views: 2

China, Hong Kong, Stablecoin