Hong Kong Central Bank Denies Issuance of Offshore Yuan Stablecoins

TLDR

• HKMA warns no yuan-pegged stablecoins have been approved in Hong Kong.

• UXLINK’s governance vote could unlock early tokens to compensate hack victims.

• Investors urged to remain vigilant after unapproved stablecoins surfaced.

• HKMA’s warning follows a rise in digital asset fraud risk within Hong Kong.

In a statement issued by the Hong Kong Monetary Authority (HKMA) on October 3, 2025, the regulatory body warned investors about unapproved yuan-pegged stablecoins. This warning comes in response to recent claims that the first offshore yuan-backed stablecoin was issued in Hong Kong. The HKMA refuted these claims and stressed that no licenses have been granted to any stablecoin issuers in the region.

The warning underscores growing concerns over the rapid rise in digital asset frauds in Hong Kong. The HKMA’s statement emphasizes that any stablecoin projects promoted as licensed by the HKMA are illegal under the city’s laws. The rising popularity of digital assets has led to an increasing number of speculative projects, many of which mislead investors with unverified claims. The HKMA urges the public to remain cautious when engaging with any such projects.

HKMA Stance on Yuan-Pegged Stablecoins

The controversy started after AnchorX, a fintech company based in Hong Kong, announced plans to issue a yuan-pegged stablecoin known as AxCNH. This stablecoin targets cross-border payments between offshore Chinese companies and their international partners. The announcement immediately sparked excitement in the crypto community, with many speculating that it would be the first stablecoin pegged to the offshore yuan in Hong Kong.

However, the HKMA swiftly issued a statement clarifying that no such license had been granted for AxCNH or any other yuan-backed stablecoin. The regulatory body has made it clear that any such issuance without a proper license is illegal. The warning emphasizes the importance of maintaining strict control over stablecoins to avoid potential risks for investors.

The HKMA’s caution reflects the growing concern among global regulators about the proliferation of unlicensed digital assets. The rise of stablecoins, particularly those pegged to national currencies like the yuan, raises concerns over market stability and the potential for illicit activities.

Hong Kong’s Regulatory Landscape and the Future of Stablecoins

Hong Kong’s Stablecoin Ordinance, which came into effect on August 1, 2025, was designed to regulate the issuance of stablecoins. The ordinance aims to ensure that only credible and compliant stablecoins are issued in the city. However, despite the ordinance, the HKMA has been cautious about granting licenses to issuers, with only a few licenses expected to be approved in the short term.

Eddie Yue, the chief executive of the HKMA, had previously noted that the regulatory framework would not lead to a flood of stablecoin issuers. Instead, the HKMA’s approach aims to ensure that stablecoins in the market are secure, transparent, and properly regulated. Industry insiders have expressed concern that the high capital and compliance costs for potential issuers may be a barrier to entry, limiting the number of applicants and slowing the growth of the stablecoin market in Hong Kong.

Despite these challenges, experts view Hong Kong’s regulatory framework as one of the safest for stablecoins globally. The city’s clear legal structure is expected to become a model for other Asian jurisdictions. However, industry leaders like Yat Siu, founder of Animoca Brands, have pointed out that the strict regulatory requirements may slow down adoption, especially for smaller firms that struggle to meet capital and liquidity thresholds.

Growing Global Demand for Stablecoins

The global demand for stablecoins has surged over the past year, driven by increasing concerns over inflation, government deficits, and economic instability. Stablecoins, particularly those pegged to fiat currencies, provide a secure way for investors to hedge against currency volatility.

However, the lack of proper regulation has led to a rise in unlicensed projects, prompting warnings from regulators worldwide.

In Hong Kong, where regulatory clarity is now in place, the market is poised for growth, albeit at a slower pace than some had anticipated. The HKMA’s stance reflects the need for caution in a rapidly evolving space. While the demand for stablecoins remains high, investors are advised to engage only with verified and licensed issuers to avoid the risks associated with unregulated projects.

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