China Signals Shift Toward Stablecoins with Hong Kong Approval

China is preparing to approve its first fiat-backed stablecoins through Hong Kong’s newly implemented licensing regime, according to sources cited by the Financial Times. This move marks a calculated opening towards digital assets, while Beijing continues to restrict retail crypto use on the Chinese mainland.

The new regulatory framework in Hong Kong allows licensed issuers to launch fiat-pegged stablecoins in a closely supervised environment. The stated goal is to facilitate financial innovation while maintaining control over digital assets.

According to available information, Chinese state-owned enterprises are preparing to apply for licenses, although the initial approval may be granted to only one of the country's four major banks. Authorities are also targeting the use of these stablecoins for B2B transactions, avoiding consumer applications.