China Poly Group's Exit from Hong Kong Stablecoin Ventures and the Rise of Centralized Alternatives

In the evolving digital asset ecosystem, China's strategic reallocation of resources and regulatory focus has become a defining narrative. The recent exit of China Poly Group from Hong Kong's stablecoin ventures-coupled with the emergence of centralized yuan-backed alternatives-highlights a broader shift in how Beijing is reshaping its approach to digital finance. This move is not merely a corporate pivot but a calculated step in a larger geopolitical and economic strategy.

The Exit: Symbolic or Strategic?

China Poly Group has officially denied any involvement in Hong Kong-based stablecoin initiatives, including the "Hong Kong Poly Stablecoin" and "Poly Stablecoin Fund," according to a Phemex report. This denial aligns with a broader regulatory crackdown on private-sector stablecoin activity in Hong Kong, where mainland firms like Ant Group and JD.com have been directed to abandon their stablecoin ambitions in favor of state-backed projects like the e-CNY, as noted in a Coinotag article. While the company's lack of direct involvement makes its exit symbolic, it underscores a critical trend: Beijing's prioritization of centralized control over digital assets.

The regulatory environment in Hong Kong has grown increasingly cautious. A Cointelegraph report, citing Caixin, revealed that mainland firms operating in Hong Kong may be forced to withdraw from cryptocurrency-related activities, including stablecoin license applications. This shift reflects a strategic reallocation of resources away from decentralized experiments toward state-sanctioned models. Hong Kong's branches of state-owned enterprises and banks are now expected to avoid competing for stablecoin licenses, signaling a coordinated effort to centralize innovation under Beijing's oversight, as the Cointelegraph report also noted.

The Rise of Centralized Alternatives

As Hong Kong's stablecoin ambitions wane, China is aggressively pursuing centralized alternatives. The State Council is reportedly reviewing a roadmap for yuan-backed stablecoins, with Hong Kong and Shanghai designated as pilot zones, according to a Forbes analysis. These projects aim to internationalize the RMB by creating a parallel channel for cross-border settlements, potentially bypassing SWIFT and U.S. correspondent banks, a point emphasized in the same Forbes analysis.

A notable example is the offshore yuan-backed stablecoin AxCNH, launched by fintech firm AnchorX and supported by blockchain company Conflux and security firm Eastcompeace, according to a Cointelegraph piece. AxCNH received in-principle approval from Kazakhstan's Astana Financial Services Authority in late 2025 and is being promoted for use in Belt and Road Initiative (BRI) trade corridors. This project, involving crypto wallet TokenPocket, highlights how China is leveraging its technological and geopolitical influence to expand the RMB's global footprint.

The strategic reallocation is not limited to pilot projects. Hong Kong's Stablecoin Ordinance, which aims to license and regulate stablecoin issuers, is being used as a testing ground for yuan-pegged instruments, as noted in the Forbes analysis. Meanwhile, Shanghai is positioned as a mainland hub for controlled experimentation, ensuring that innovation remains aligned with Beijing's monetary governance model. This dual-track approach-flexible regulation in Hong Kong and strict oversight on the mainland-allows China to balance global competitiveness with domestic control.

Strategic Implications for Investors

For investors, this shift signals a reorientation of risk and opportunity. The decline of Hong Kong's decentralized stablecoin ecosystem reduces exposure to speculative, unregulated projects but also limits innovation in a market that once promised high growth. Conversely, the rise of centralized alternatives like AxCNH and the e-CNY introduces new opportunities in state-backed digital assets, particularly for those aligned with China's geopolitical goals.

However, risks remain. Beijing's tight controls on issuance and redemption of yuan-backed stablecoins are designed to prevent capital flight and maintain monetary stability, a concern highlighted in the Forbes analysis. This means liquidity constraints and regulatory unpredictability could persist, even as the government softens its stance. Investors must also consider the geopolitical implications: a successful yuan-backed stablecoin could challenge the U.S. dollar's dominance in global trade, reshaping cross-border payment dynamics, as argued by The Diplomat.

Conclusion

China Poly Group's exit from Hong Kong's stablecoin ventures is a microcosm of a larger trend: the centralization of digital finance under state control. While Hong Kong's role as a decentralized hub diminishes, the rise of yuan-backed stablecoins signals a bold attempt to internationalize the RMB and reassert China's influence in global trade. For investors, the key takeaway is clear: the future of digital assets in China will be defined not by decentralized innovation but by strategic, state-driven reallocation.