Beijing's New Regulatory Definition and Hong Kong Policy Watershed: People's Bank of China Defines Stablecoin Regulatory Framework for the First Time

The People’s Bank of China recently held a meeting of the coordination mechanism for cracking down on virtual currency trading and speculation, during which it officially defined stablecoins for the first time, explicitly positioning them as a form of virtual currency. This move marks an important step forward in Beijing’s regulatory approach to crypto assets and also clearly delineates the regulatory policies between mainland China and Hong Kong.

PBOC Clarifies Definition, Stablecoins Face the Strictest Regulatory Framework

According to the regulatory definition by the People’s Bank of China, stablecoins currently cannot effectively meet compliance requirements such as customer identity verification and anti-money laundering measures, and pose multiple risks including being used for money laundering, illegal financing, and cross-border fund transfers. The issuance of this definition reflects Beijing’s financial regulators’ in-depth review of the virtual currency ecosystem and their emphasis on financial security and anti-money laundering. By formally defining the nature and risk characteristics of stablecoins, regulatory authorities lay a theoretical foundation for subsequent centralized rectification actions.

Mainland Focused Rectification vs. Hong Kong’s Differentiated Policy

In contrast to Beijing’s strict crackdown, industry insiders point out that the People’s Bank of China’s regulatory measures will not directly impact Hong Kong’s policy layout in the stablecoin field. This reflects Hong Kong’s stance as an international financial center, adopting a differentiated approach to digital asset regulation compared to the mainland. While mainland stablecoin speculation will face focused rectification, Hong Kong remains relatively open to compliant stablecoin projects, leaving space for innovation in this area.

Hong Kong Stablecoin Outlook Limited, Practical Application Is Key

Although Hong Kong’s regulatory policies are relatively lenient, industry analysis suggests that subsequent domestic entities deploying stablecoin projects in Hong Kong will face significant restrictions on their imagination space. This is mainly due to the limited market size in Hong Kong and regulatory compliance requirements. Stablecoin applications in Hong Kong will focus more on scenarios with actual value, including cross-border payment settlement and supply chain finance. In contrast, pure speculation space will be greatly compressed, and project teams must demonstrate real application value to gain market recognition.

This regulatory initiative by the People’s Bank of China signifies further standardization of stablecoin regulation worldwide. Beijing’s definition draws a red line for the mainland market, while Hong Kong, maintaining openness, guides stablecoins back to their practical application essence.