Going to Shanghai Xinshida: Domestic payment institutions that "enter" stablecoins

Web3.0 can be regarded as a hot topic that domestic payment institutions have paid attention to in the past two years, from NFT, meta-universe to cryptocurrencies, especially stablecoins related content. Since the domestic ban on cryptocurrency-related industries in 2021, cryptocurrencies have once withdrawn from the vision of domestic payment institutions. But as global trade demand for stablecoins increases, international and domestic payment giants are paying more and more attention to stablecoin payments. So which domestic licensed payment institutions have "entered" stablecoins? What other issues are worth paying attention to?

1. Ban

In September 2021, the People's Bank of China, the Cyberspace Administration of Information Technology, the Supreme People's Court, the Supreme People's Procuratorate, the Ministry of Industry and Information Technology, the Ministry of Public Security, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, and the State Administration of Foreign Exchange jointly issued the "Notice on Further Preventing and Handling the Risk of Speculation in Virtual Currency Transactions". The notice clearly states that virtual currency-related business activities are illegal financial activities, and overseas virtual currency exchanges provide services to residents in my country through the Internet are also illegal financial activities.

The joint issuance of so many departments means that almost all virtual currency-related market behaviors are banned. As of now, no updated laws and regulations have lifted the injunction, or further clarification. This makes it illegal for all virtual currency formats to be carried out in mainland China or to serve domestic residents.

Before this, the major manufacturers also expressed their relevant positions.

In 2018, Tencent stated that it has always adhered to the principle of resolutely not providing relevant services for illegal financial activities such as "domestic and overseas ICO token issuance, virtual currency transactions", including not providing relevant payment channels, advertising services and other businesses. In addition, Ma Huateng made a clear statement during the Two Sessions that year that Tencent would not issue virtual currencies because blockchain is still in the early stages of development and needs to establish an effective application model, and once the issuance of coins will cause a series of regulatory problems. But Tencent has never stopped exploring blockchain technology and its applications.

In June 2021, Alipay also issued a statement banning the use of the company's services for virtual currency transactions such as Bitcoin, and at the same time, it continued to carry out a comprehensive investigation and crackdown on virtual currency transactions.

However, as time goes by, the development of global stablecoin payment has exceeded many people's expectations, and the integration of Web2.0 payment (traditional payment) and Web3.0 payment has become an industry hotspot.

2. Enter the game

Under the ban on mainland China, not to develop business in mainland China, not serve mainland Chinese residents, and even not touch any RMB-related business has become a consensus among many companies that want to get involved in cryptocurrency. There are obvious signs at present, and the affiliated companies of licensed payment institutions that have entered cryptocurrency-related businesses abroad include JD.com (online banking online), Ant Group (Alipay), Lianlian, Yibao, etc.

In July 2024, the Hong Kong Monetary Authority announced the first batch of "stable coin issuer sandboxes", including five other institutions including JD Coin Chain Technology (Hong Kong) Co., Ltd. Under the permission of the Hong Kong government, JD affiliated companies actually participated in the research and development of stablecoins. Its official website shows that JD stablecoin is in a state of being launched. JD stablecoin is 1:1 pegged to the Hong Kong dollar (HKD). It is based on public blockchain and aims to become one of the leading digital currencies for enterprises and individuals to seek efficient, economical and secure payment solutions.

Not long after, AirstarBank, a subsidiary of Xiaomi (the payment institution is Jiefu Ruitong), announced that it would cooperate with JD Coin Chain to explore cross-border payment solutions for enterprises based on stablecoins. Therefore, Xiaomi can be regarded as a Ming card participating in stablecoin payment.

In addition, in August 2024, Ant International and DBS Bank jointly launched a pilot project of "DBS Treasury Tokens" to improve financial and liquidity management. The pilot runs on its licensed blockchain to facilitate multi-currency treasury and liquidity management in various markets.

In December 2024, DFX Labs, a wholly-owned subsidiary of Lianlian Digital, obtained a Hong Kong VATP virtual asset trading platform license.

There is also a Web3.0 company with Yibao's "gene" and has also received high attention in recent years, that is Kun KUN. In February 2025, Kun KUN just announced that it had received a seed round of financing of tens of millions of US dollars. Its official industrial positioning is to solve the challenges faced by cross-border payments by building and operating a compliance bridge between stablecoins and fiat currency systems. It can be simply understood as conducting acceptance business between stablecoins and fiat currencies.

Perhaps it is based on compliance considerations, Kun KUN specifically stated on its official website that it will only provide compliant payment consulting services to customers outside of mainland China and the United States.

From an official perspective, Kun KUN is Yibao's overseas ecological partner, and Kun KUN's chief consultant is Yu Chen, president of Yibao Payment. Regarding the relationship between Kun KUN and Yibao, Yu Chen said: "This brand has nothing to do with Yibao Payment. Yibao Payment runs compliant business under the supervision of the central bank, and there is another system for overseas business."

It is worth mentioning that Kun KUN has in-depth cooperation with Hong Kong virtual asset exchange HashKey.

For Web3.0, Tencent mainly focuses on investment. In the past two years, it has invested in Lens Protocol and Chainbase, and has become partners with Ankr, Avalanche, Scroll and Sui. These four projects are well-known projects in the crypto industry.

Strictly speaking, PayPal is also licensed in China, and PayPal also issued the US dollar stablecoin PYUSD in the past two years.

The above-mentioned relevant institutions' actions to enter cryptocurrencies and stablecoins can be learned through public information. However, most institutions have not exposed too much about the actions of the stablecoin payment industry, or it has not yet reached the right time.

3. Confused

Leading institutions issue coins, waist institutions serve as trading platforms, and small institutions conduct OTC over-the-counter trading.

This seems to have become the basic judgment for major institutions to enter the stablecoin payment industry. However, more observing and waiting and watching institutions are thinking about when to join the market, how to make good risk cutting, and how to gain customer trust in new business formats.

When will you join? From the perspective of international regulations, financial centers such as the United States, Hong Kong, China and other financial centers are formulating relevant laws and regulations on stablecoins. When will it be officially issued and how to develop the business have become the focus of many people. In addition, based on the demand for trade in goods, many payment companies are also observing the overall demand for stablecoin payment by customers, and then making the next step of making plans. Although some institutions have not made any moves on the surface, they have still more or less involved in stablecoin-related business formats overseas based on customer needs.

Risk isolation. Based on the policy of banning virtual currencies by mainland China, the best risk isolation measure is that neither new companies nor new products have any connection with mainland China. The most popular method at present is to establish independent companies in Hong Kong, Singapore and other places in China, and after completing the acceptance of stablecoins and fiat currencies, it will make mature fiat currencies cross-border payments.

Customer trust. Establishing a new company overseas to develop business will encounter new trust problems. After all, if the new company has no connection with a mainland Chinese company, customers are worried that they will run away with the money, and if they are too close to mainland Chinese companies, compliance issues will arise. How to handle the close relationship between new and old business formats is also testing the wisdom of payment companies.

"In Web 2.0, you can only do payments, but in Web 3.0, you can do any financial role." At present, the relevant regulatory measures for Web 3.0 are not yet perfect, and many practitioners expressed such feelings.

From a trend perspective, in the process of integrating Web2.0 and Web3.0, stablecoin payment-related business models need to gain wider recognition and must be more compliant. The important underlying logic of finance is the transmission of trust, and the most direct way to have government endorsement, actively embrace supervision, and issuing licenses.

But before this, if the law does not prohibit it, my life is up to me, and my life is up to me, but God.