According to reports by Caixin, China will block state‑linked firms (like SOEs and major banks) and large internet companies from participating in Hong Kong’s stablecoin license applications or crypto project development. this is part of Beijing’s strategy to tighten oversight on digital assets and reduce potential risks associated with stablecoins.

The regulatory regime in Hong Kong for stablecoins became active on August 1, 2025. Under this framework, applicants must meet licensing requirements, including full reserve backing, strong KYC/AML measures, and other compliance standards.because of that, state‑owned enterprises and related institutions may find themselves excluded from obtaining these licenses.

Some big names from China’s tech and finance sector appear to be stepping back from crypto‑related plans in Hong Kong.the reason cited includes regulatory uncertainty and the new restrictions that disallow or complicate participation by entities with mainland/state links.

For investors and the crypto industry, this means a shift in the competitive landscape in Hong Kong. Private and foreign firms may now have more opportunity under the stablecoin licensing regime, while state‑linked institutions must navigate new constraints. at the same time, regulatory risk remains high: policies could evolve, and compliance costs and licensing conditions may deter participation.