The latest policy adjustment reads less like a crackdown than a structural re-ordering.
On the surface, it tightens around cryptocurrency activity again. In design terms, it also places a second category inside a framework that can be defined, approved and supervised. The door closes. A narrow gap remains. That is the signal.
On February 6, 2026, eight Chinese authorities led by the central bank issued a joint notice on risks linked to virtual currencies. It reiterates that crypto-related businesses remain illegal financial activities. It also extends scrutiny to offshore providers and to overseas conduct by domestic actors.
The document’s structure matters as much as its tone. It restates prohibition. But it treats tokenization of real-world assets as a distinct object of governance. Domestic activity remains constrained. Yet an exception is written into the rulebook: cases approved by competent authorities and conducted through designated financial market infrastructure.
Constraints remain explicit: approvals, filings, cross-border procedures, foreign-exchange controls, data governance and anti-money laundering. The framing, however, is no longer “all on-chain equals illegal.” It identifies where supervised activity can exist. That is the gap.
The gap is not about technology. It is about capital.
If domestic assets are permitted, under controlled conditions, to enter offshore issuance and trading, the questions become practical: Who buys, with what currency, and through which settlement rails?
If an asset-backed token is issued abroad while the underlying rights originate in mainland China, approval and filing requirements still apply. “Same business, same risk, same rules” follows the asset. Jurisdiction does not stop at the border.
This is where Hong Kong becomes functional, not symbolic. It is the only Chinese city combining common-law foundations, deep capital markets and mature cross-border infrastructure. Its role has long been translation: turning Chinese assets into instruments that global investors can analyze, risk-manage and allocate.
If real world assets are the carrier, Hong Kong needs matching payment and clearing tools. That is the strategic position of Hong Kong dollar stablecoins.
Hong Kong runs its own digital-asset regime. The Stablecoins Ordinance, effective since August 2025, requires issuers of fiat-referenced stablecoins to become licensed by the Hong Kong Monetary Authority and to meet standards on reserve quality, liquidity and redemption.
Mainland enterprises may use cross-border structures, including Hong Kong special purpose vehicles, to place assets into issuance environments that global investors recognize. Repatriation of funds still runs through established compliance channels, subject to foreign exchange, cross-border financing, data-transfer and anti-money laundering requirements.
This does not remove regulation. It makes participation reviewable. The Hong Kong Monetary Authority has been clear that stablecoins are infrastructure, not speculation. They must be supervised, transparent and institution-ready. Project Ensemble is built to test whether tokenized money and tokenized assets can settle efficiently within controlled parameters. The objective is not to evade regulators. It is to reduce friction for regulated activity.
Once issuance moves offshore under approval and filing constraints, the use case for Hong Kong dollar stablecoins is straightforward: subscription, distribution and secondary liquidity. If those flows become routine, the infrastructure stops being theoretical.
Some will frame this as a move to bypass the dollar system. That is a misread. Blockchain-based settlement can reduce reliance on traditional correspondent chains and improve speed. In some configurations, direct exposure to US touchpoints may fall. But Hong Kong operates a linked-exchange-rate regime. It is integrated into global clearing networks. Reserve composition, sanctions compliance and the identity of investors or platforms can pull transactions back toward US regulatory boundaries quickly.
This is an efficiency redesign, not decoupling. What changes is format. And friction. Currency choice provides the sharper clue. The February notice makes clear that, without proper approval, no party may issue offshore stablecoins linked to the renminbi. An RMB stablecoin for international markets is not the near-term route.
In contrast, the centrally managed, traceable e-CNY architecture continues on its official track. The division of labor is clearer: Sovereign digital currency remains the central bank’s domain. Offshore circulation mechanics are where Hong Kong is expected to experiment – under supervision.
The next test is behavioral: how global capital responds. For large institutions, blockchain is rarely the obstacle. Title certainty, compliance clarity and exit mechanics are. When an authorized outbound framework exists and Hong Kong offers a transparent, reviewable market environment, sidelined capital can run the China decision again.
The shift may not be loud. It may be persistent. Pension, insurance and sovereign pools pay for certainty. When they get it, they size up.
Who will go first? Not the glamorous assets. Early real world assets most likely will come from instruments with stable cash flows, clean ownership and familiar regulatory treatment: infrastructure concessions, utilities, income-producing property and standardized supply-chain finance. They are not narrative-rich. They are priceable.
Tokenization usually starts with the boring. From this angle, the “gap” is not small. It reconnects offshore capital with Chinese assets under supervision. It creates real demand for Hong Kong’s emerging payment instruments. And it preserves authority over the capital account and monetary sovereignty.
This is not liberalization. It is controlled access. For markets, the key is not how wide the door looks. It is whether it works. Here, it does.
Jeffrey Sze is ambassador for arts, culture and tourism of Reichenau, and chairman of Habsburg Asia. He serves as general partner of Archduke United LPF and Asia Empower LPF, focusing on cross-border institutional investment at the intersection of art, finance and regulated digital innovation, including AI and digital assets. In 2017, he was involved in securing one of Switzerland’s early cryptocurrency exchange licenses.
