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China is leveraging Hong Kong in its efforts to expand its influence over the gold market, building up trading infrastructure to draw foreign investors while mining companies tap the territory's stock market to fund overseas expansion.
The Hong Kong government recently established Hong Kong Precious Metals Central Clearing, a fully state-owned company that will start operating on a trial basis this year. The government also aims to expand the territory's gold storage facilities to more than 2,000 metric tons within three years. It plans to <a href="https://asia.nikkei.com/business/markets/commodities/hong-kong-shanghai-gold-exchange-team-up-as-price-hits-new-high" target="_blank" rel="noopener">work more closely</a> with the Shanghai Gold Exchange as well.
China is the world's largest producer and consumer of gold, yet international prices are determined largely in the London bullion market and the New York futures market, which have the necessary infrastructure. Chinese authorities hope to change this.
"We will expand the country's market share and influence on prices in the international gold market," said Joseph Chan Ho-lim, Hong Kong's undersecretary for financial services and the treasury, at the Hong Kong Gold Exchange in a Lunar New Year address on February 20.
The planned infrastructure will pave the way for mainland investors to trade and store gold in Hong Kong. This activity could, in turn, draw overseas investors. If Hong Kong becomes established as a bullion market, Asian countries will save on transport and logistics costs compared with handling delivery in London.
Alongside these efforts, gold mining companies in mainland China are expanding overseas. Zijin Gold International, a unit of Zijin Mining Group, one of the largest state-owned players, announced plans in January to <a href="https://asia.nikkei.com/business/business-deals/china-s-zijin-to-buy-canadian-owner-of-gold-mines-in-3-african-countries" target="_blank" rel="noopener">acquire Canada's Allied Gold</a> for about CAD 5.5 billion (USD 4 billion), giving it stakes in projects in Ethiopia and Mali.
The Hong Kong stock market has been funding this overseas expansion. Zijin Gold raised about HKD 28 billion (USD 3.6 billion) through an IPO last September. Chifeng Jilong Gold Mining, China's largest private gold mining company, has <a href="https://asia.nikkei.com/business/markets/commodities/china-s-top-private-gold-miner-lists-in-hong-kong-to-fuel-global-growth" target="_blank" rel="noopener">listed in Hong Kong</a> to fund mines in Laos and Ghana.
Gold mining stocks have outperformed the broader Hong Kong market. Zijin Mining shot up roughly 150% in 2025, then jumped about 26% from the end of 2025 to February 23, beating the benchmark Hang Seng Index, which rose about 28% in 2025 and 6% from year's end to February 23. Chifeng Gold climbed 34% from the end of 2025 to February 23.
The Chinese government's vision of making Hong Kong a gold trading hub is boosting these companies' shares. Higher stock prices can, in turn, enable them to raise more growth capital from the market to boost their expansion abroad.
Geopolitics are likely a factor in the apparent coordination between the public and private sectors to acquire gold-mining rights while also bringing gold trading to China.
"Emerging countries saw how Western countries froze Russia's assets after its invasion of Ukraine and have been moving to keep their gold within their own borders," said Koichiro Kamei, head of Japan's Market Strategy Institute.
The People's Bank of China increased its gold holdings for 15 straight months through January. It has been lowering the share of US treasuries in its foreign currency reserves, in an apparent effort to reduce its reliance on the US dollar.
BofA Securities sees much more room for the Chinese central bank to buy more gold. This could provide support to prices now at record highs of around USD 5,000 per troy ounce.
This article first appeared on <a href="https://asia.nikkei.com/business/markets/commodities/china-eyes-hong-kong-as-gold-trading-hub-in-bid-for-market-dominance">Nikkei Asia</a>. It has been republished here as part of 36Kr’s ongoing partnership with <a href="https://www.kr-asia.com/nikkei-teams-up-with-36kr-in-asia-tech-news-coverage/">Nikkei</a>.

China eyes Hong Kong as gold trading hub in bid for market dominance

Investment

Merger &amp; Acquisition

Hong Kong

China

… control over vocal styles and emotional expression, producing compositions up to five minutes in length, according to the company.
MiniMax also launched MaxClaw, a cloud-based AI assistant built on OpenClaw. The service does not require local deployment or additional API fees and operates continuously in the cloud. Users with a basic MiniMax Agent subscription can access it immediately. The company said the product gained traction shortly after launch.
Over time, MaxClaw could strengthen user retention and willingness to pay by delivering ready-to-use automated services. Increased usage may also generate feedback data that supports model improvement, reinforcing a cycle between product adoption and model iteration.
<h3>Endorsement from global investment banks</h3>
In recent months, several global and domestic investment banks, including JPMorgan Chase, UBS, Goldman Sachs, CICC, CSC Financial, and Guotai Haitong, initiated coverage on MiniMax. They assigned buy, overweight, or outperform ratings, with target prices above HKD 1,000 (USD 128).
JPMorgan said MiniMax stands out in the foundation model segment for combining technical capabilities, multimodal commercialization potential, and global scalability. It cited the company’s benchmark performance, diversified B2B and B2C monetization pathways, and international expansion strategy.
UBS said MiniMax is positioned to capture AI growth opportunities in both domestic and overseas markets, pointing to its multimodal strategy, R&amp;D execution, and global commercialization footprint.
Goldman Sachs highlighted its diversified revenue structure and multimodal product portfolio.
CICC described MiniMax as one of the few Chinese companies to demonstrate both foundation model capability and global commercialization of AI-native applications.
CSC Financial characterized foundation model competition as an evolving global race, arguing that MiniMax’s sustained model development, cost efficiency, overseas expansion, and open-source and agent ecosystem contribute to its competitive position.
Guotai Haitong cited improvements in technical performance and efficiency, cost control that supports commercialization, and momentum from product iteration and ecosystem expansion in the emerging agent landscape.
JPMorgan added that China’s AI sector is moving beyond an early phase marked by a proliferation of large model startups into a stage defined by commercialization capability, model originality, and global expansion. In that context, it said MiniMax represents not only a technology company, but also China’s broader participation in the global AI value chain.
This <a href="https://xueqiu.com/2854806290/377646197">article</a> was adapted based on a feature originally written by Stone Jin and published on IPO Zaozhidao. KrASIA is authorized to translate, adapt, and publish its contents.

MiniMax’s ARR tops USD 150 million as it pivots toward an AI platform model

East Asia

MiniMax

Artificial Intelligence

Deep Tech

Foundation and Large Models

… events.</li>
</ul>
Headline comparisons of live commerce metrics can therefore be misleading. While live streams function as an entry point for TikTok Shop, they serve as an engagement layer on Shopee, embedded within a broader transactional ecosystem.
whereRelatedArticle
<h3>The US is next</h3>
Consumers tend to benefit from competition in sectors tied to daily spending, including e-commerce, where promotions, subsidies, and product innovation are often driven by the need to outperform rivals. KrASIA expects Southeast Asia’s market to remain effectively a duopoly for the foreseeable future, even as market share shifts incrementally.
That dynamic may partly explain TikTok Shop’s increased focus on markets outside Southeast Asia, most notably the US, where it has expanded significantly over the past year.
According to <a href="https://momentum.asia/insights/detail/tiktok-shop-in-the-us-h1-2025">Momentum Works</a>, TikTok Shop’s US GMV reached USD 15.1 billion in 2025, representing 68% year-on-year growth. While slower than its initial expansion phase, the pace remains notable.
The report added that 2,143 US stores on TikTok Shop exceeded USD 1 million in GMV in 2025, including 135 that surpassed USD 10 million. The number of influencers generating more than USD 1 million in GMV more than tripled to 1,785. These figures point to rising merchant and creator participation on the platform.
<h3>TikTok Shop is more than a disruptor</h3>
If Shopee’s defining narrative in Southeast Asia during the first half of the 2020s was one of dominance, the years ahead may test the durability of that position as TikTok Shop reshapes competitive dynamics.
E-commerce in the region continues to expand, leaving room for multiple players to compete. No platform can be ruled out, including those currently on the periphery.
While TikTok Shop has clearly moved beyond the role of disruptor, it’s worthwhile to note that Shopee retains structural advantages, including broader GMV, established logistics infrastructure, and integrated financial services. Even so, its margin trajectory and strategic priorities are likely to be shaped, at least in the near term, by the pace and persistence of TikTok Shop’s expansion.

TikTok Shop narrows the gap with Shopee in Southeast Asia’s e-commerce market

Sea Group

TikTok

Shopee

TikTok Shop

Southeast Asia

E-commerce

Retail

Consumer Economy

Singapore

Malaysia

Thailand

Vietnam

Indonesia

Philippines

… for chronic metabolic diseases. It said the proceeds will support clinical development and pipeline expansion. —<a href="https://36kr.com/p/3705039542710665">36Kr</a></li>
<li aria-level="1">WonderLab, a digital mental health platform, has completed a Series B+ round worth an eight-figure RMB sum, with Marathon Venture Partners as the sole investor. The company has also launched a new financing round, with Index Capital serving as financial advisor. WonderLab operates a database containing more than 300,000 real-world mental health patient records and says it provides integrated services across 16 provinces and more than 100 cities in China. It will use the capital primarily for product development. —<a href="https://36kr.com/p/3670040712094601">36Kr</a></li>
<li aria-level="1"><a href="http://www.appsofs.com.cn/">Appsofs Technology</a>, a Beijing-based technology company, has completed a Series B round backed by the Beijing Advanced Manufacturing and Intelligent Equipment Industry Investment Fund. The company develops underwater sensing and equipment systems, including fiber optic hydrophone arrays and distributed fiber sensing instruments. It said the funding will support development of advanced underwater instruments, R&amp;D of unmanned marine systems, and expansion into civilian applications such as marine observation and infrastructure monitoring. —<a href="https://36kr.com/p/3698026314870659">36Kr</a></li>
</ul>
whereRelatedArticle
<h3>Eezee, Diaflow, GIC, and others made recent headlines:</h3>
<ul>
<li aria-level="1"><a href="https://eezee.sg/">Eezee</a>, a Singapore-based procurement and supply chain platform, raised USD 5 million in a pre-Series B round led by Korea Investment Partners. Existing backers Kickstart Ventures and Wavemaker Ventures also participated, alongside several other investors.</li>
<li aria-level="1"><a href="https://www.diaflow.io/">Diaflow</a>, a Singapore-headquartered startup, raised an undisclosed amount of seed funding from Insignia Ventures Partners.</li>
<li aria-level="1">GIC, Singapore’s sovereign wealth fund, anchored Anthropic’s Series G round alongside Coatue. The US-based AI firm raised USD 30 billion in the round at a post-money valuation of USD 380 billion, drawing investment from a slate of institutional and venture capital investors.</li>
</ul>
If there are any news or updates you'd like us to feature, get in touch with us at: <a href="mailto:hello@kr-asia.com">hello@kr-asia.com</a>.

Deals in brief: Aonic, Dyna.Ai, and MyFirst raise Series A funding; Icon1c secures member backing; seven China investments; and more

Venture Capital

Private Equity

… required tour guides to generate on-site sales, a practice that has been criticized for distorting service incentives. By promoting customized travel and small-group products, the platform is encouraging agencies to compete on service design and execution.
Company data indicate that per capita spending on small-group products increased by 80%, while trip duration rose by 13%. On the supply side, the company reports supporting 3,500 small and medium travel agencies in upgrading service capabilities and contributing to the creation of more than 50,000 jobs, with over half located in second-tier and lower-tier cities.
The company also reported that more than 20,000 hybrid driver-and-guide roles were added nationwide in 2025. This reflects a shift toward multifaceted roles that combine transportation and personalized guiding services, aligning with smaller group formats.
<h3>Using technology for inclusion</h3>
Scalability underpins platform enablement, and technology serves as the primary mechanism. In tourism, where transactions depend heavily on information clarity and trust, <a href="/industry/ai">artificial intelligence</a> functions as infrastructure linking domestic suppliers with international demand.
According to Trip.com, it invests approximately RMB 1 billion (USD 140 million) annually in related areas, with technology as a central focus. Its proprietary travel-focused large language model has translated product information from more than 8,000 partners into 25 languages and introduced 63,000 ticket types that can be booked by international visitors.
The system is designed to interpret complex cancellation and refund policies specific to travel services, reducing uncertainty for overseas customers unfamiliar with local terms.
In customer service, AI-driven tools can provide real-time multilingual interpretation in online consultations, while the company’s phone system offers simultaneous interpretation. These functions standardize multilingual support, lowering barriers for small merchants to serve international customers.
In 2025, nearly 70,000 China-based merchants received inbound orders through the company’s overseas platform for the first time, including more than 63,000 hotels, according to company data.
Beyond technology, Trip.com allocated RMB 2.9 billion (USD 406 million) in 2025 to service guarantees, including disaster relief funds, a global SOS platform covering 27 medical assistance providers and one million medical institutions, and round-the-clock multilingual customer support.
These expenditures function as ecosystem-level risk management mechanisms. With platform-backed guarantees, small merchants may be more willing to accept complex international bookings. Travelers, aware of available support systems, may be more inclined to visit less familiar destinations.
Taken together, the company’s investments in regional digital infrastructure, merchant operational tools, multilingual technologies, and service guarantees indicate a reorientation of platform value from transaction scale to ecosystem capacity.
Strategy, capital allocation, and operational involvement have evolved. The platform is assuming greater responsibility for infrastructure development, operational standardization, and risk mitigation. Profitability increasingly reflects returns on these service-intensive activities rather than pure traffic aggregation.
Its main function, however, remains organizing markets and improving efficiency. The longer-term measure of performance may depend less on transaction volume and more on whether regional suppliers become more competitive, tourism resources generate sustainable economic value, and consumers access safer and more diverse travel options.
KrASIA features translated and adapted content that was originally published by 36Kr. This <a href="https://36kr.com/p/3699717997031300">article</a> was written by 36Kr Caijing.

Trip.com invests in the next phase of online travel

Travel

… are expected to account for 28% by 2035. Hybrid models, a strength of Japanese automakers, are expected to rise from 24% to 32% over the same period.
While the Thai market itself is not large, as an export base for neighboring countries, trends there could determine the future of electrification in Southeast Asia.
This article first appeared on <a href="https://asia.nikkei.com/business/automobiles/china-automakers-look-to-toyota-in-next-growth-push-in-thailand">Nikkei Asia</a>. It has been republished here as part of 36Kr’s ongoing partnership with <a href="https://www.kr-asia.com/nikkei-teams-up-with-36kr-in-asia-tech-news-coverage/">Nikkei</a>.

China automakers look to Toyota in next growth push in Thailand

Transportation

Electric Vehicles

Mobility

Qwen’s ordering feature quietly processed millions of orders over Lunar New Year and much of February, turning text and voice prompts into a direct channel for food delivery, ride-hailing, and other services. Now, <a href="/company/alibaba">Alibaba</a> is looking to take that experience beyond the smartphone and into hardware people can wear throughout the day.
According to 36Kr, citing sources familiar with the matter, Qwen is preparing to enter the hardware space. In 2026, Alibaba plans to launch a lineup of consumer devices embedded with <a href="/industry/ai">artificial intelligence</a>, including glasses, earbuds, and rings, with a global rollout strategy.
Among them, Qwen AI glasses debuted at the 2026 Mobile World Congress, with preorders scheduled to begin today.
To deepen cross-device integration, Alibaba plans to migrate functions currently embedded in the Qwen app, such as food ordering and ride-hailing, onto these wearables, 36Kr reported. The goal is continuity: accessing services with minimal friction, regardless of device.
Alibaba is not alone. Meta, after gaining early traction with its Ray-Ban Meta smart glasses, is reportedly building a broader wearable ecosystem centered on AI glasses. Media reports suggest its pipeline includes earbuds, neural wristbands, and smartwatches.
<a href="/company/openai">OpenAI</a> has also reportedly assembled a hardware team of more than 2,000 people. It is said to be planning multiple consumer hardware releases either later this year or in 2027, spanning categories such as smart glasses, voice recorders, and wearable pins.
In China, <a href="/company/bytedance">ByteDance</a> is also preparing its own glasses and earbuds.
Alibaba has already tested the waters. In 2025, its Quark team released AI glasses, while its DingTalk unit launched an AI-powered voice recording device, DingTalk A1. The next phase, however, appears more centralized and strategic.
That shift is reflected in internal restructuring. In December 2025, Alibaba merged its intelligent information and intelligent connectivity business groups to form a new consumer business group focused on Qwen. The unit now oversees the Qwen app, Quark, AI-driven hardware, and other consumer-facing operations under a unified structure.
Alongside these changes, Alibaba has been optimizing its AI models for on-device deployment.
On February 16, it open-sourced a next-generation large model, Qwen 3.5 Plus. The model reportedly uses 60% less memory while increasing maximum inference throughput by up to 19 times. On pricing, Qwen 3.5 Plus charges as little as RMB 0.8 (USD 0.11) per million tokens in API fees, about one-eighteenth the cost of Gemini 3 Pro, according to company disclosures. Memory footprint and operating cost are key constraints for edge devices, making such improvements strategically significant.
For Alibaba, the move appears to be about more than launching a few new gadgets.
Over the past decade, it has built a broad ecosystem of software, from Alipay to Amap, Taobao, Freshippo (also known as Hema), and Fliggy. What it has arguably lacked is a unifying interface that connects these services through Qwen.
That interface could remain an app. But it could also take the form of wearables that serve as a persistent gateway to Alibaba’s digital ecosystem. Glasses, earbuds, rings, and pendants are established wearable formats. They are lightweight, personal, and potentially always on.
There is also a data dimension. Devices worn throughout the day provide a channel to collect first-person, multimodal data from real-world interactions. For companies like Alibaba, such data could feed back into model training and refinement, creating a self-reinforcing feedback loop that strengthens Qwen over time.
Alibaba may also have structural advantages in hardware. On the infrastructure side, it operates Tongyi, one of the largest open-source model families. It has developed its own chip subsidiary, T-Head Semiconductor, which produces the Zhenwu 810E processor, and runs Alibaba Cloud, one of the world’s largest cloud computing platforms by scale.
On the software side, Alibaba controls platforms across payments, mobility, <a href="/industry/e-commerce">e-commerce</a>, grocery retail, and travel. In theory, AI agents could operate across these verticals within a unified ecosystem.
As Alibaba CEO Eddie Wu has previously noted, AI’s potential may lie less within the confines of a smartphone screen and more in how it navigates and manages the digital world. If Qwen becomes that gateway, Alibaba may be positioned to shape the next dominant interface in everyday life.
KrASIA features translated and adapted content that was originally published by 36Kr. This <a href="https://36kr.com/p/3702628151751046">article</a> was written by Qiu Xiaofen for 36Kr.

Alibaba aims to take Qwen from app to wearable interface

<a href="/company/luckin-coffee">Luckin Coffee</a> ended 2025 with another quarter of rapid revenue growth and continued store expansion. The December period also highlighted the tradeoff in its growth model. Delivery-led volume and rapid footprint expansion lifted sales, while higher delivery costs and a weaker subsidy environment compressed margins.
Total net revenues rose 32.9% year-on-year (YoY) to RMB 12.8 billion (USD 1.8 billion) in the fourth quarter, and GMV (gross merchandise value) increased 32.8% to RMB 14.8 billion (USD 2.1 billion).
Growth was broad-based across channels. Revenue from self-operated stores increased 32.0% to RMB 9.6 billion (USD 1.3 billion), while revenue from partnership stores rose 39.2% to RMB 2.9 billion (USD USD 406 million), lifting the partnership contribution to 22.3% of total net revenues.
Luckin’s expansion momentum continued. The company ended the year with 31,048 stores, after 1,834 net new openings in the fourth quarter and 8,708 net new stores for the full year 2025. It also reported 98.4 million average monthly transacting customers in Q4, up 26.5% YoY.
<h3>Margin compression was the quarter’s central tension</h3>
Despite the strong topline, profitability weakened in Q4. GAAP operating income fell 18.5% YoY to around RMB 800 million (USD 112 million), and operating margin declined to 6.4% from 10.5% a year earlier. On a non-GAAP basis, operating margin declined to 7.5% from 11.5%, and non-GAAP net margin fell to 5.5% from 9.8%.
The shift was clear in the cost lines. Luckin’s biggest swing came from delivery. Delivery expenses rose 94.5% YoY to RMB 1.6 billion (USD 224 million), lifting the delivery expense ratio to 13% of net revenues from 9% in the same quarter of the previous year. The company attributed the increase primarily to higher delivery volumes through third-party platforms.
That sensitivity is not company-specific. China’s branded coffee market remains highly promotional, shaped in part by rivals such as Cotti Coffee, which have kept effective pricing aggressive. In this environment, the level of third-party delivery subsidies can quickly affect conversion and determine who absorbs fulfillment costs, either consumers through higher fees or merchants through lower margins. Luckin’s Q4 cost lines suggest more of that burden fell on the merchant side.
There is also broader cost pressure in the background, including higher coffee bean prices, tariffs, and labor-related expenses. Luckin’s disclosure, however, suggests that Q4 pressure was driven more by delivery economics, as its materials cost ratio remained flat. Cost of materials rose 33.2% YoY to RMB 5.1 billion (USD 714 million) but held steady at 40% of net revenues. Store rental and other operating costs increased 32.8% YoY to RMB 3.2 billion (USD 448 million), in line with the company’s larger footprint and higher operating scale.
whereRelatedArticle
The margin pressure was visible in unit economics. Luckin reported self-operated store-level operating profit of RMB 1.4 billion (USD 196 million), described as largely flat YoY, but the self-operated store-level operating margin fell to 15% from 19.8%. In simple terms, Luckin sold substantially more but retained less profit per RMB of sales during the quarter.
One constructive signal was that same-store sales for self-operated stores turned positive. Same-store sales grew 1.2%, improving from a 3.4% decline a year earlier.
In practical terms, that suggests the existing store base stabilized. But the low single-digit rate also implies that most of Luckin’s Q4 growth still came from new store openings, more transacting customers, and channel mix, rather than stronger growth from stores that were already open.
<h3>Strong full-year results help explain the Q4 picture</h3>
For the full year, the business appeared healthier than the Q4 margin alone suggests. For financial year 2025, net revenues increased 43% YoY to RMB 49.3 billion (USD 6.9 billion), and GAAP operating income rose 42.1% YoY to RMB 5.1 billion (USD 714 million), with an operating margin of 10.3%, roughly steady from 2024.
Self-operated same-store sales growth for the year was 7.5%, reversing a steep decline in 2024. Average monthly transacting customers rose 31.1% YoY to 94.2 million.
Those full-year figures suggest Q4 was not a broad demand breakdown. It appears more like a seasonal quarter in which delivery economics and subsidy dynamics had a greater impact.
Luckin reported net cash from operating activities of RMB 600 million (USD 84 million) in Q4, down from RMB 1.6 billion a year earlier.
At the same time, its liquidity buffer expanded. Cash and cash equivalents, restricted cash, term deposits, and short-term investments totaled RMB 9 billion (USD 1.3 billion) at December 31, 2025, up from RMB 5.9 billion (USD 826 million) a year earlier.
<h3>What to watch next</h3>
Investors may spend the coming quarters seeking clarity on whether Q4’s margin compression was largely seasonal and subsidy-related, or whether it reflects a more persistent shift in costs and competition.
Three indicators stand out: whether Luckin’s delivery expense as a percentage of revenue declines from the Q4 level, whether store-level margins at self-operated stores stabilize, and whether same-store sales growth moves beyond the low single digits, which would signal that the expanded store base is generating stronger repeat demand rather than relying primarily on new openings.
Note: RMB figures are converted to USD at a rate of RMB 1 = USD 0.14 for reference, unless otherwise stated. Company disclosures may apply different exchange rates.

Luckin Coffee’s strong Q4 growth offsets margin pressure

Luckin Coffee

Coffee

… Associates who advises on licensing applications.
"The majority were companies in traditional business sectors and had limited experience in crypto, or had no solid idea of what they wanted to do with the license," Ng said, adding that many simply thought of getting involved with stablecoins as a way to draw attention and boost their share price. Such behavior led to a warning to investors from the Hong Kong Monetary Authority (HKMA) and Securities and Futures Commission to "exercise caution" regarding corporate stablecoin announcements and rumors.
Three potential stablecoin issuers were ultimately allowed into the sandbox: a unit of Chinese online retailer <a href="/company/jd">JD.com</a>; a joint venture between Standard Chartered Bank, local telecommunications operator HKT and Hong Kong-based gaming and blockchain company Animoca Brands; and RD Technologies, a company founded by former HKMA CEO Norman Chan and backed by Chinese investors, including a unit of ZhongAn Online P&amp;C Insurance.
The full list of license hopefuls has not been made public. Local press reports, though, identified the local unit of Bank of China and Alipay operator <a href="/company/ant-group">Ant Group</a> as among the companies that were planning to submit applications.
Some Chinese companies got cold feet at the last minute after receiving discouraging signals from Beijing. Two and a half weeks before September's Hong Kong application deadline, Ant Group CEO Cyril Han declared at a conference in Shanghai that the company would not be issuing any kind of cryptocurrency. The fully prepared application of a Chinese state-owned bank was also held back, according to a person familiar with the matter.
JD.com's subsidiary in the Hong Kong sandbox is still officially in the running for a license, but it has all but given up, according to a person familiar with the company's decision-making. To some extent, this is the result of a feeling of suffocating oversight in the sandbox from Hong Kong regulators, the person said. Teddy Liu, CEO of the JD.com unit, Jingdong Coinlink Technology Hong Kong, declined to comment on the license application.
Adding to the anxiety of Chinese companies like JD.com, the People's Bank of China explicitly declared in December that <a title="" href="https://asia.nikkei.com/spotlight/cryptocurrencies/china-central-bank-s-crypto-warning-hits-related-hong-kong-shares" target="_blank" rel="noopener">stablecoins cannot be legally used</a> to settle payments, noting it "currently cannot effectively meet the requirements of customer identification and anti-money laundering."
Weeks ago, <a title="" href="https://asia.nikkei.com/spotlight/cryptocurrencies/china-bans-unapproved-issuance-of-yuan-linked-stablecoins-overseas" target="_blank" rel="noopener">the central bank went further</a> in a jointly issued statement with seven other Chinese government bodies:
<blockquote>"No entity or individual, whether domestic or foreign, may issue stablecoins pegged to the [Chinese yuan] overseas."</blockquote>
The two announcements suggest regulators in Beijing concerned about maintaining financial control have outflanked those who argue that China must offer an alternative to dollar-based stablecoins.
"Mainland Chinese authorities aim to rein in potential financial risk spillover from digital asset activities outside of China," Michael Huang, associate director of financial institution ratings at S&amp;P Global Ratings, said on February 13.
Highlighting the PBOC's concerns, Monique Taylor, a global political economy lecturer at the University of Helsinki, wrote after the bank's December announcement that stablecoins "can circulate beyond regulatory oversight, interfere with capital account management and complicate the central bank's control over money supply and settlement. Stablecoins also risk re-dollarizing the digital economy."
Some Chinese officials are also said to worry that stablecoins could distract from the <a title="" href="https://asia.nikkei.com/business/finance/china-starts-paying-interest-on-digital-yuan-in-latest-bid-to-extend-its-reach" target="_blank" rel="noopener">country's official digital currency</a>, the e-CNY, which has caught on less than authorities had hoped. Others remain wary of hidden risks with stablecoins, as reflected in incidents such as the 2022 collapse of South Korean entrepreneur Do Kwon's TerraUSD stablecoin, which had a market cap of USD 18 billion but was not backed by dollar reserves and lost more than 90% of its value when its peg gave way.
While Hong Kong's first stablecoins are now expected to be linked to the US and Hong Kong dollars rather than the yuan, the latest announcement has piled on uncertainty for Chinese companies looking to be involved in the city's rollout, such as RD Technologies' shareholders.
"Companies' stablecoin business plans are now in limbo, because they do not know if they are legal or illegal anymore," a blockchain executive said. "It will take some time before they can clarify with the regulators."
The Chinese regulators' statements also leave unclear the status of Astana-licensed AxCNH, which remains in circulation with a market cap of USD 5.52 million as of February 19. AnchorX, the Hong Kong-based issuer of the stablecoin, did not respond to requests for comment amid the Lunar New Year holidays.
CEO Hill Wang, previously a managing partner at Chinese private equity group Hony Capital, told interviewers last year that AnchorX would apply for a Hong Kong stablecoin license. The company secured rights to the "AxHKD" trademark in Hong Kong in 2024 but it is not clear whether AnchorX went through with filing a stablecoin license application in the city.
Meanwhile, AnchorX remains linked to Beijing-based Hony: Goldstream Investment, a Hony investment arm, holds preferred shares in the AxCNH issuer that can be converted into a 5% stake, according to a stock exchange filing. The stablecoin is based on a blockchain platform developed in China by Conflux Network, which has received funding from the Shanghai government and partnered with state-owned China Telecom.
In any case, even after the license winners are announced, industry players said it could take another four to six months for Hong Kong-issued stablecoins to hit the market, given the need to fix arrangements for custody, distribution and other matters.
There are still "a couple of moving pieces," said Dominic James, a partner with law firm Sidley Austin in Hong Kong.
This article first appeared on <a href="https://asia.nikkei.com/spotlight/policy-asia/hong-kong-s-stablecoin-drive-nears-quiet-climax">Nikkei Asia</a>. It has been republished here as part of 36Kr’s ongoing partnership with <a href="https://www.kr-asia.com/nikkei-teams-up-with-36kr-in-asia-tech-news-coverage/">Nikkei</a>.

Hong Kong's stablecoin drive nears quiet climax

Fintech

Cryptocurrencies