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(Reuters) -Chinese tech giants including Alibaba-backed Ant Group and e-commerce group JD.com have paused plans to issue stablecoins in Hong Kong after the government raised concerns about the rise of private sector-controlled currencies, the Financial Times reported on Saturday.
The companies have put their stablecoin ambitions on hold after receiving instructions from Chinese regulators, including the People’s Bank of China and the Cyberspace Administration of China, not to go ahead with the plans, the Financial Times reported, citing people familiar with the matter.
The Hong Kong legislature passed a stablecoin bill in May that established a licensing regime for fiat-referenced stablecoin issuers in Hong Kong, providing regulatory clarity for future entrants.
Under the new regime, anyone issuing stablecoins in Hong Kong – or issuing stablecoins backed by Hong Kong dollars, whether inside or outside the city – must obtain a license from the Hong Kong Monetary Authority.
Ant Group said in June that it would participate in the stablecoin pilot program. JD.com has also said it will participate in the pilot, according to the Financial Times.
People’s Bank of China officials advised against participating in the initial launch of stablecoins over concerns about allowing technology groups and brokerages to issue any type of currency, according to the Financial Times report.
Reuters could not immediately verify the report. Ant Group, JD.com, PBOC and CAC did not respond to requests for comment.
An HKMA spokesman told Reuters on Sunday in an email that it does not comment on market rumours.
Stablecoins, a type of cryptocurrency designed to maintain a constant value, usually pegged to a fiat currency such as the US dollar, are often used by cryptocurrency traders to move funds between tokens.
(Reporting by Chandni Shah in Bengaluru; Additional reporting by Liz Lee in Beijing; Editing by Franklin Paul, Michael Perry and Christian Schmollinger)
