Chinese internet giants and state-owned enterprises may face restrictions on stablecoin activities in Hong Kong. Reports indicate that mainland Chinese firms operating in Hong Kong could be compelled to withdraw from crypto-related activities following a recent policy shift. Major banks like HSBC and the Industrial and Commercial Bank of China are also anticipated to refrain from seeking stablecoin licenses. This development emerges with the new stablecoin regulatory framework effective from August 1, where interest was expressed by 77 institutions. However, a senior financial insider noted that the future direction of Hong Kong’s stablecoin business remains uncertain. Previously interested institutions had shown enthusiasm, but the latest shifts suggest they might delay or withdraw their license applications. Additionally, there are indications that the Hong Kong Monetary Authority may ease capital requirements for banks dealing with crypto. Despite concerns over stablecoins being exploited for fraudulent activities, the Chinese government is also seen to be cautiously exploring the potential of stablecoins for international currency promotion.

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