Hong Kong’s Crypto Tango: Will Chinese Firms Sit This One Out? 🕺💼

by

What ho, old bean! It appears the chaps over in Hong Kong are giving the old heave-ho to Chinese internet giants, state-owned enterprises, and financial institutions when it comes to stablecoin and crypto shenanigans. 🧐💸

According to a Thursday tittle-tattle from the ever-so-reliable Caixin, mainland Chinese firms operating in Hong Kong might be shown the door when it comes to cryptocurrency-related capers. The Hong Kong branches of several state-owned enterprises and Chinese banks, bless their cotton socks, are expected to sit this one out rather than join the scramble for a Hong Kong stablecoin license. 🏃‍♂️🔒

This news comes hot on the heels of reports that HSBC and the Industrial and Commercial Bank of China (ICBC), the world’s largest bank by total assets (no slouch, that one), are planning to toss their hats into the stablecoin ring in Hong Kong. Hong Kong’s spiffy new stablecoin regulatory framework kicked off on August 1 with a six-month transition period, during which 77 institutions have reportedly expressed interest. Fancy that! 🎩📜

However, Caixin spills the beans that recent policy flip-flops mean Chinese banks and other institutions might just withdraw from the race faster than Jeeves dodges a poorly aimed cricket ball. An anonymous financial industry insider, presumably clutching a martini, reportedly whispered to the outlet that these players may postpone their stablecoin license applications. 🍸🤫

Fears of Risk Transfer, or “Passing the Hot Potato” 🥔🔥

A source, presumably with a finger on the pulse, told Caixin, “Hong Kong’s stablecoin business is just beginning, and its future direction is as clear as a mud puddle after a monsoon,” adding that it was jolly important “not to rush into participation like a bull in a china shop.” 🐂🍽️

Major Chinese institutions, bless their hearts, had shown interest before the policy U-turn. In August, a China Merchants Bank subsidiary launched a Hong Kong-based institutional crypto exchange, only to find the rug pulled out from under them. 😱💨

China-based e-commerce titan JD.com also reportedly registered entities tied to a potential stablecoin rollout just days before Hong Kong’s new stablecoin regime became effective. Similarly, Ant International, not to be outdone, registered entities tied to stablecoin rollouts in Hong Kong and Singapore in early June. Busy bees, those ones! 🐝📝

Hong Kong Wants to Simplify Crypto for Banks, or “Making It Rain Digital Dollars” 💸🌧️

This report follows another Caixin article suggesting the Hong Kong Monetary Authority (HKMA) may ease capital requirements for banks handling crypto. According to the Thursday gossip, the HKMA is reportedly considering lowering bank capital requirements, making it easier for banks to dip their toes into the crypto pool. 🏦🌊

The report states that Hong Kong authorities intend to optimize crypto asset capital regulations to help banks accept compliant stablecoins and promote investments in digital assets based on public, or permissionless, blockchains. Quite the mouthful, what? 📚🔗

CryptoMoon attempted to wrangle a comment from the HKMA but, alas, was met with the sound of crickets. 🦗📰

China’s Cautious Approach to Stablecoins, or “Playing It Cool Like a Cucumber” 🥒🆒

According to Caixin, restrictions will also be placed on investments by these companies in crypto and crypto exchanges. The Chinese government’s stance toward stablecoins is about as surprising as finding a penguin in the Arctic. 🐧❄️

In early August, Chinese authorities reportedly told local firms to cease publishing research and holding seminars related to stablecoins, citing concerns that stablecoins could be exploited for fraudulent activities. Tsk, tsk, always the skeptics! 😒📉

Still, China appears to be giving stablecoins a once-over. According to late August reports, Chinese authorities may authorize yuan-backed stablecoins for the first time to promote the global use of its currency. A strategic move, if ever there was one! 🌍💹

The report followed the Shanghai State-owned Assets Supervision and Administration Commission’s meeting to discuss strategic responses to stablecoins and digital currencies, showing a slight thaw in their icy demeanor. ❄️☀️

In late July, Chinese blockchain Conflux introduced a new stablecoin backed by offshore Chinese yuan meant for circulation in “Belt and Road” countries and explicitly barred from use in mainland China. Quite the globetrotter, that one! 🌏✈️

Read More

2025-09-11 18:10