The month of June witnessed a remarkable surge in interest surrounding stablecoins, transforming them from a niche topic into a major focus within financial circles.
This surge was catalyzed by significant regulatory developments and high-profile endorsements. During the Lujiazui Forum on June 18, People's Bank of China Governor Pan Gongsheng publicly discussed stablecoins, signaling a proactive regulatory stance. Shortly after, on June 25, International Monetary Fund (IMF) Deputy Managing Director Bo Li announced at the 2025 Summer Davos Forum that the IMF is collaborating with multiple agencies to develop standards and guidelines for stablecoins, aiming to assist nations in their implementation.
The market response was immediate and powerful. On that same day, Guotai Junan International Holdings saw its stock price skyrocket by nearly 200% after receiving approval to provide virtual asset trading services in Hong Kong.
This activity was mirrored in the analytical community, with dozens of securities firms publishing research reports on stablecoins. Data from Wind platform indicated that over 50 roadshows and conference calls related to stablecoins were held throughout June.
Corporate giants are also making significant moves. JD.com's Richard Liu mentioned during pre-618 event discussions that the company plans to apply for stablecoin licenses in major currency countries worldwide. Meanwhile, Ant Group's Ant Digital Technologies has established its overseas headquarters in Hong Kong and completed trials within the city's regulatory sandbox. The company has now initiated the application process for a Hong Kong license, with Ant International announcing plans to develop stablecoin businesses across Hong Kong, Singapore, and Luxembourg.
Reducing Overdependence on the US Dollar
To understand why stablecoins are gaining such prominence, we must first clarify what they are.
Stablecoins are a category of cryptocurrency whose value is pegged to specific assets, typically fiat currencies. They are characterized by price stability, blockchain technology foundation, high payment efficiency with low costs, and issuance by private entities. Currently, USDT and USDC dominate the market with over 90% combined share, both pegged to the US dollar.
Essentially, stablecoins represent a form of cryptocurrency. Chinese regulators had previously suspended all domestic cryptocurrency trading in September 2021 over concerns about potential impacts on financial system stability. However, June marked a significant turning point in this stance.
Governor Pan's statement at the Lujiazui Forum emphasized the need to build a diversified global monetary landscape, suggesting that both the digital yuan and stablecoins have potential as new solutions for cross-border settlement. He highlighted how current global payment systems suffer from low efficiency and frequent geopolitical risks, making traditional pathways insufficient for future needs—a limitation further amplified by digital technology advancements.
Morgan Stanley analysts identify the further legitimization of US stablecoins as a crucial background factor driving this change. In May, the US Senate passed the Guided and Established New Initiatives for the United States (GENIUS) Act, which mandates that issuers must hold 100% US dollars and short-term treasuries while publishing their reserve composition monthly. The legislation also establishes tiered regulation, restricts foreign stablecoin access, and enforces anti-money laundering measures.
This development effectively grants legal status to dollar-pegged stablecoins as "on-chain dollars," potentially incorporating them into global payment infrastructure and creating new pathways for dollar expansion. This could further solidify the US currency's dominant position in the global economy.
Consequently, reducing overdependence on the US dollar and achieving diversification within the increasingly digital international monetary reserve system has become a primary objective for many economies. This context makes regulatory openness toward stablecoin exploration a milestone event in the internationalization of the Chinese yuan.
Hong Kong has emerged as the testing ground for the central bank's exploration of future payment alternatives. On May 30, the Hong Kong SAR government gazetted the draft Stablecoin Ordinance, followed by an announcement on June 6 specifying that the ordinance would take effect on August 1.
According to these regulations, all stablecoins claiming to peg their value to the Hong Kong dollar will be classified as "payment instruments" and subject to a licensing management system. The ordinance establishes requirements similar to the US GENIUS Act, including that issuers must hold 100% high-quality reserves (creating a 1:1 redemption mechanism), cannot pay interest to stablecoin holders, and must meet various operational control requirements covering anti-money laundering and counter-terrorist financing.
How Are Stablecoins Actually Used?
With basic regulatory measures being established, how exactly are stablecoins utilized, and what advantages do they offer compared to traditional fiat currencies?
Market discussions primarily focus on two application scenarios: reconstructing cross-border payments and the tokenization of real-world assets (RWA).
For cross-border payments, stablecoins' most significant advantage is their potential to reduce transaction costs. Traditional retail payment systems are dominated by a few card organizations like Visa and Mastercard. When consumers make purchases, transactions must pass through at least four main participants: the merchant, their acquiring bank, the card network, and the consumer's issuing bank. This process results in high transaction costs and slow settlement.
Card networks typically charge 2%-3% of the transaction value in the US, a cost ultimately passed on to consumers through商品定价. Furthermore, due to the clearing and settlement processes between banks and institutions, merchants often wait 1-3 working days for funds to arrive, significantly impacting their cash flow.
Leveraging blockchain technology, stablecoins can simplify and accelerate this traditional banking payment system. Stablecoin payments involve funds moving directly from a consumer's digital wallet to a merchant's digital wallet via a blockchain network, bypassing all intermediaries. This eliminates transaction fees and enables instant settlement, unaffected by complex processes or business hours.
Additionally, stablecoins can facilitate a globally unified payment network. Based on open public blockchains, they possess borderless characteristics that challenge the global network advantage traditionally held by card organizations.
The RWA tokenization market is also developing rapidly with existing practical applications. In simple terms, RWA involves tokenizing tangible or intangible real-world assets through blockchain technology, converting them into tradable digital tokens on the chain for global investors to buy and sell, thereby enhancing asset liquidity.
In practice, Ant Digital Technologies collaborated with mainland listed company Longsing Technology to complete China's first cross-border financing of new energy RWA in August 2024. Last December, Ant further partnered with green energy service provider GCL Energy Technology on China's first photovoltaic实体资产RWA, involving over RMB 200 million.
Ant Digital Technologies believes stablecoins will become crucial transaction "currencies" in RWA scenarios. Once assets like new energy or gold are tokenized via blockchain, compliant stablecoins can serve as direct pricing and settlement tools for peer-to-peer transactions, simplifying the cumbersome processes传统跨境支付依赖SWIFT而形成 and reducing transaction costs.
For individual investors, stablecoin development offers a potential配置选择 for low-volatility, cash-like assets. 👉 Explore advanced investment strategies to understand how these new instruments might fit into your portfolio. Recently, Hong Kong's Securities and Futures Commission approved 40 institutions to upgrade their licenses, allowing them to provide virtual asset trading services through comprehensive accounts. These include 38 securities firms, one bank, and one internet company, with Guotai Junan International becoming the first Chinese-funded securities firm to obtain a full virtual asset license.
Who Is Building the Stablecoin Ecosystem?
With the Stablecoin Ordinance即将生效, Hong Kong has positioned itself as the first jurisdiction globally to establish a licensing system for stable fiat currencies. The Hong Kong Monetary Authority is expected to announce the first list of licensed stablecoin issuers between July and August, allowing initial sandbox participants to formally apply for licenses.
So which entities are currently actively participating in this emerging landscape?
Market information indicates that Ant Digital Technologies has applied for a Hong Kong stablecoin license. JD.com's Bilian Technology CEO Liu Peng stated the company plans to officially obtain a Hong Kong stablecoin issuance license by early Q4 2025. LianLian Digital's subsidiary is collaborating with Yuanfu Technology on a stablecoin project, while Linklogis is partnering with Standard Chartered on another initiative.
Furthermore, ZA Bank has become Hong Kong's first digital bank to provide services to stablecoin issuers, and China Everbright Limited has invested in Circle, the "first stablecoin stock" which listed on June 5.
On June 15, China Asset Management (Hong Kong) CEO Tian Gan mentioned during a stablecoin seminar that his company "should be the only Chinese-funded asset management company in Hong Kong that has participated in three major sandbox projects of the HKMA." Regarding the stablecoin sandbox, he noted that three institutions were initially involved: Yuanfu Innovation Technology, JD Bilian Technology, and Standard Chartered Bank. China Asset Management (Hong Kong) has collaborated with one potential stablecoin issuer to jointly submit a cash management方案至香港金管局.
He also observed that in the Hong Kong market, the most active banks in tokenized payments include Ant International, Standard Chartered, HSBC, Deutsche Bank, and ANZ Bank, with Chinese-funded banks not yet积极参与.
"Standard Chartered is the most invested commercial bank globally in Web 3.0, having already established custody businesses in Luxembourg, Dubai, Singapore, and Hong Kong. HSBC, Deutsche, and ANZ are also actively following up," Gan stated.
Looking toward the future, Gan predicted that the global monetary system might converge toward a few mainstream stablecoins, but this process would rely on strong financial markets and trade scenarios. He believes Hong Kong's实践不仅为人民币国际化提供新路径 but could potentially reshape the underlying logic of international financial infrastructure.
Frequently Asked Questions
What exactly is a stablecoin?
A stablecoin is a type of cryptocurrency designed to maintain a stable value by being pegged to a reserve asset like a fiat currency (e.g., US dollar) or commodity. This differentiates it from more volatile cryptocurrencies like Bitcoin or Ethereum.
How do stablecoins maintain their peg to traditional currencies?
Most stablecoins maintain their peg through holding reserves equivalent to their circulating supply. For example, a USD-backed stablecoin issuer should hold $1 in cash or cash equivalents (like short-term Treasury bills) for every 1 stablecoin issued, ensuring users can theoretically redeem their coins at any time.
What are the main benefits of using stablecoins for payments?
The primary benefits include significantly lower transaction costs compared to traditional payment networks, near-instant settlement times 24/7, and access to a borderless payment system that doesn't require traditional banking intermediaries.
Are stablecoins regulated like traditional currencies?
Regulation is still evolving rapidly. Different jurisdictions are approaching stablecoin regulation differently, with Hong Kong and the United States recently establishing licensing frameworks that treat certain stablecoins as regulated payment instruments rather than traditional currencies.
What risks are associated with stablecoins?
Key risks include potential reserve mismanagement (where issuers don't hold adequate reserves), regulatory uncertainty across different markets, technological risks associated with blockchain networks, and the potential for use in illicit activities if proper safeguards aren't implemented.
How might stablecoins impact traditional banking?
Stablecoins could challenge traditional banking by providing alternative payment systems that operate outside conventional banking hours and networks. However, they may also create new opportunities for banks to engage in digital asset custody, issuance services, and integration with traditional financial products.