Hong Kong-listed firms with cryptocurrency exposure tumbled on Monday after China’s central bank pledged a fresh clampdown on virtual currencies and raised issues over the growing use of stablecoins.
The warning, issued by the People’s Bank of China (PBOC) at the weekend, said regulators had detected a resurgence in crypto speculation and would intensify action against illegal trading activities.
It was said that the statement followed a meeting involving 13 government agencies and underscored Beijing’s firm opposition to private digital currencies.
Liu Honglin, founder of Man Kun Law Firm, revealed the announcement “has erased any ambiguity, speculation and illusions” about Beijing’s position on stablecoins.
“Regulators have drawn a concrete red line on what used to be a vague borderline,” he said.
The renewed scrutiny rattled markets in Hong Kong, where interest in digital assets has grown since the city passed a stablecoin bill in May aimed at creating a regulatory framework for fiat-backed tokens.
That enthusiasm has periodically spread across the border despite mainland China’s ban on cryptocurrency trading since 2021.
Yunfeng Financial Group, which has been expanding its digital-asset and tokenisation ventures, fell more than 10 per cent in early trading, putting the stock on course for its steepest drop in two months.
Bright Smart Securities and Commodities Group declined about 7 per cent, while OSL Group, a major digital-asset platform, slipped more than 5 per cent.
The PBOC singled out stablecoins as a particular concern, warning that many failed to meet requirements for customer identification and anti-money-laundering controls.
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