The volatile nature of cryptocurrencies has long posed challenges for mainstream adoption—until stablecoins emerged as a bridge between traditional finance and the digital asset world. As Bitcoin plunged below $60,000 in early August 2025 and Ethereum dipped beneath $2,100, market turbulence once again highlighted the need for digital assets with reduced volatility.
Enter stablecoins: crypto tokens pegged to real-world assets like fiat currencies, designed to maintain price stability. According to the Bank for International Settlements (BIS), stablecoins are defined as cryptocurrencies whose value is linked to legal tender or other underlying assets. By maintaining a 1:1 parity with their reference currency, they enable smoother transactions, act as reliable stores of value, and serve as critical gateways between conventional banking systems and blockchain ecosystems.
With a total market capitalization exceeding $160 billion, stablecoins have become foundational to the crypto economy. USDT, issued by Tether, dominates the space with over 70% market share—valued at more than $110 billion. USDC follows distantly at around $33 billion. While most major stablecoins are dollar-backed, a growing number of regional players are exploring local-currency alternatives—especially in Asia.
🔗 Hong Kong’s Strategic Push Into Regulated Stablecoin Innovation
Hong Kong has positioned itself as a forward-thinking hub for digital finance. In July 2025, the Hong Kong Monetary Authority (HKMA) launched its first cohort of participants in the Stablecoin Issuer Sandbox, signaling a major regulatory milestone.
Among the selected issuers was JD Blockchain Tech (Hong Kong), a subsidiary of JD.com founded by Richard Liu (Liu Qiangdong). Notably, they joined forces with Airstar Bank, a licensed virtual bank majority-owned by Xiaomi Corporation—founded by Lei Jun (Lei Jun). This marks a rare convergence of two Chinese tech titans—Liu and Lei—in the emerging field of digital currency innovation.
👉 Discover how global fintech leaders are shaping the future of cross-border payments.
Airstar Bank confirmed it will collaborate with JD Blockchain Tech to pilot new cross-border payment solutions powered by stablecoins, leveraging the HKMA’s regulatory sandbox framework. The initiative aims to streamline international remittances, reduce transaction costs, and enhance financial inclusion across borders.
This partnership underscores a broader trend: e-commerce and fintech giants are no longer just observers in digital finance—they’re active builders.
🔗 Understanding the Stablecoin Landscape: From USD to HKD
Stablecoins fall into three primary categories:
- Fiat-collateralized (e.g., USDT, USDC): backed 1:1 by reserves such as cash or short-term government bonds.
- Crypto-collateralized (e.g., DAI, USDe): over-collateralized using other digital assets.
- Algorithmic (e.g., FRAX): use smart contracts and algorithms to manage supply and demand dynamics.
Currently, fiat-backed stablecoins dominate due to their simplicity and trust model. Over 99% of all stablecoins are pegged to the U.S. dollar. However, regional alternatives are gaining traction:
- EURT (Euro-pegged): ~$38 million market cap
- GYEN (Yen-pegged): ~$14 million
- IDRT (Indonesian Rupiah): ~$11 million
Now, Hong Kong is stepping up with its own currency-backed solutions. Both JD Blockchain Tech and Onyric Technology (Circle Innovation) plan to issue HKD-pegged stablecoins, fully backed by high-liquidity assets held in segregated accounts at licensed financial institutions.
These reserves will be subject to regular audits and public reporting—a key requirement under Hong Kong’s proposed regulatory regime.
In a statement provided to media, JD Group emphasized its identity as "a technology and service enterprise rooted in supply chain infrastructure", with blockchain efforts focused on solving real-world problems like cross-border payments and global settlement inefficiencies.
Onyric’s CEO Rita Liu noted that their HKD stablecoin isn’t meant to compete directly with USDT or USDC but instead aims to expand use cases across Web2 and Web3 environments, connecting traditional users with decentralized applications.
🔗 Regulatory Momentum Builds in Hong Kong
Hong Kong’s journey toward regulated stablecoin issuance began in October 2022 with the release of the Policy Statement on Virtual Assets Development, which identified stablecoins as a strategic priority.
By December 2023, the Financial Services and Treasury Bureau (FSTB) and HKMA issued a joint consultation paper outlining a proposed licensing regime for stablecoin issuers. In March 2025, the HKMA introduced the Stablecoin Issuer Sandbox, allowing qualified firms to test products under regulatory supervision.
The July 2025 consultation summary outlined clear legislative next steps: formal submission to the Legislative Council, followed by official guidelines. If passed, Hong Kong could become one of the first jurisdictions globally with a comprehensive legal framework for retail-focused stablecoins.
This structured approach balances innovation with investor protection—making Hong Kong an attractive launchpad for compliant digital asset projects.
🔗 Could a RMB-Backed Stablecoin Be on the Horizon?
While JD and Airstar Bank are currently developing HKD-pegged tokens, both companies trace their roots to mainland China. This raises a compelling question: Is a renminbi-backed stablecoin next?
China's strict capital controls and cautious stance on private cryptocurrencies make domestic RMB stablecoins unlikely in the near term. However, an offshore RMB-backed stablecoin, issued from Hong Kong using offshore RMB (CNH) reserves, presents a viable path forward.
Several attempts have already been made:
- Tether launched CNHT, a CNH-pegged stablecoin.
- TRON introduced TCHN, another RMB-linked token.
- CNHC Group once issued CNHC, though its team was later disbanded amid unrelated legal issues.
An officially supported offshore RMB stablecoin could offer significant advantages:
- Facilitate seamless trade settlements in ASEAN and Belt & Road markets.
- Enhance liquidity in offshore RMB markets—where holdings exceed $9.3 trillion in financial assets.
- Support Hong Kong’s role as the world’s largest offshore RMB hub (with over ¥1.08 trillion in Hong Kong bank deposits alone).
Moreover, unlike central bank digital currencies (CBDCs), stablecoins operate on decentralized networks where user identities aren't inherently tied to transactions. This inherent privacy helps avoid data sovereignty conflicts—making them more acceptable in international corridors.
As blockchain adoption grows, so does the potential for RMB-denominated stablecoins to drive financial innovation beyond borders.
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FAQ Section
Q: What is a stablecoin?
A: 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., USD, HKD), commodities, or other crypto assets.
Q: Why are JD.com and Xiaomi involved in Hong Kong’s stablecoin sandbox?
A: Both companies aim to leverage blockchain technology for cross-border payments and financial services innovation. Their participation reflects a strategic move into digital finance infrastructure.
Q: Can individuals use these new HKD stablecoins?
A: Initially, usage may be limited to institutional partners and pilot programs within the regulatory sandbox. Broader retail access depends on final regulatory approval.
Q: Is a Chinese yuan (RMB) stablecoin legal?
A: A mainland-based RMB stablecoin would conflict with current regulations. However, an offshore version backed by CNH reserves issued from Hong Kong is technically feasible and aligns with international compliance standards.
Q: How do stablecoins differ from CBDCs?
A: Central Bank Digital Currencies (CBDCs) are state-issued digital money with full legal tender status. Stablecoins are privately issued and rely on market trust and collateral backing rather than government mandate.
Q: Will RMB-backed stablecoins challenge the U.S. dollar’s dominance?
A: Not immediately. But in specific trade regions—particularly across Asia and emerging markets—they could increase RMB usage and support broader de-dollarization trends over time.
The convergence of e-commerce powerhouses like JD and Xiaomi with Hong Kong’s progressive fintech policies signals a pivotal shift. As regulators lay the groundwork for safe innovation, the stage is set not only for HKD stablecoins but potentially for a new era of offshore RMB digital assets.
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With strong institutional backing, clear use cases, and growing demand for efficient global payments, the arrival of a widely adopted RMB-linked stablecoin may be closer than many expect.