Hong Kong Stablecoin Stocks Plunge Following China’s PBOC Crackdown on Cryptocurrency
Hong Kong – Shares of companies related to stablecoins and cryptocurrency trading listed in Hong Kong fell sharply on Monday, December 1, 2025, after the People’s Bank of China (PBOC) vowed to intensify its crackdown on virtual currencies and flagged growing concerns specifically about stablecoins.
On Saturday, the PBOC, together with 13 other government agencies, issued a stern warning targeting a recent resurgence in crypto speculation and illegal activities associated with stablecoins, including deficiencies in customer identification and anti-money-laundering controls. The announcement ended any ambiguity regarding China’s stringent stance on stablecoins, drawing a clear regulatory “red line,” according to Liu Honglin, founder of the Man Kun Law Firm.
This statement has shaken investor confidence, triggering a selloff in Hong Kong-listed stocks with cryptocurrency exposure. Notably, Yunfeng Financial Group, which has been aggressively expanding into crypto and tokenization businesses, dropped over 10% in early trading, facing its worst session in two months. Meanwhile, Bright Smart Securities and Commodities Group fell roughly 7%, and digital asset platform OSL Group declined more than 5%.
Interest in virtual currencies had surged earlier in the year after Hong Kong introduced a stablecoin bill in May, which laid down a legal framework for fiat-backed cryptocurrencies in a bid to position the city as a leading digital asset hub in the region. However, the PBOC’s recent crackdown signals China’s continued hardline approach toward crypto activities despite Hong Kong’s efforts to foster the industry under its autonomous legal system.
Since 2021, cryptocurrency trading has been banned in mainland China. The recent PBOC statement reflects lingering concerns over stablecoins facilitating illicit money laundering, cross-border financing, and fraud. These stablecoins, pegged to traditional fiat currencies, were criticized for lacking legally recognized status and failing to meet stringent financial regulations.
The crackdown also affected Chinese technology companies linked to cryptocurrency ambitions in Hong Kong. For instance, Alibaba-backed Ant Group and e-commerce giant JD.com have paused plans to issue their own stablecoins following vocal opposition by the PBOC regarding private-sector controlled currencies.
This regulatory environment contrasts sharply with other jurisdictions such as the United States, where stablecoin regulatory frameworks are evolving toward more acceptance and integration.
The tightening measures come amid recent reports from China Daily and other official channels emphasizing that all virtual currency activities remain illegal financial operations within mainland China. The PBOC and related agencies reaffirmed their commitment to rooting out speculative trading, which they consider a new financial risk and challenge to systemic stability.
Despite Beijing’s crackdown, Hong Kong continues to distinguish itself as a separate legal jurisdiction with a more supportive stance on cryptocurrency innovation, demonstrated by events such as the government-backed Hong Kong Fintech Week and high-profile participation in conferences like CoinDesk’s Consensus.
Market observers are closely watching how these contrasting policies will shape the cryptocurrency landscape in Greater China, as Hong Kong navigates the balance between innovation and regulatory compliance amid Beijing’s tightening control.