This article is reprinted with permission from the Bai Lu Salon, author: Lulu, copyright belongs to the original author.
In the context of the global digital asset wave, the regulatory policies in the Chinese-speaking world—especially in mainland China and Hong Kong—have remained like a taut string, balancing the tension between innovation impulses and risk prevention. From September 2024 to September 2025, mainland China maintained a high-pressure stance, while Hong Kong actively constructed a framework while gradually tightening restrictions on Chinese-funded institutions. The evolution of policies during this period is not merely a pile of isolated texts but is embedded in a broader economic context: on one hand, the Federal Reserve's interest rate cut cycle and the global cryptocurrency market recovery stimulated investment enthusiasm; on the other hand, geopolitical uncertainties and concerns about capital outflows prompted regulators to strengthen defenses. Through these changes, we can see a subtle shift in regulatory thinking—from simple prohibition to a deepening of precise cross-border risk prevention, especially targeting the Web3 layouts of large companies and listed institutions, stablecoin issuance, and RWA attempts.
The policy dynamics of this year are reflected not only in official documents and statements but also through specific cases that reflect the enforcement intensity. For example, the contraction of Chinese-funded brokerage firms' crypto businesses in Hong Kong and the revocation of licenses for certain platforms have become warning signals for the business community. This article will narrate around two main lines from mainland China and Hong Kong, interspersed with relevant cases, exploring how these policies affect A-shares and Hong Kong-listed companies.
Looking back to the autumn of 2024, the tone of mainland crypto regulation had already taken shape, but during this year, policies began to focus more on execution details and international coordination. In October 2024, the People's Bank of China reiterated its "zero tolerance" attitude towards virtual currency trading in its annual financial stability report. This was not new, but the report emphasized for the first time the potential risks of stablecoins as "dollar shadows," pointing out that they could amplify capital outflows and exchange rate fluctuations. This statement was not made in a vacuum but was a response to the expansion of the global stablecoin market—such as Tether (USDT) surpassing a market capitalization of $120 billion—resulting in spillover effects. Traditional fiat currencies should account for a large portion of 70% in US settlements, while the renminbi, though not a large share, still holds a certain position; however, dollar stablecoins account for over 90% of on-chain settlements, while renminbi stablecoins have a negligible presence. Mainland regulators are concerned that if the dollar stablecoin system is linked to domestic assets, it will undermine the sovereign status of the renminbi.
Entering 2025, this concern transformed into more concrete actions. In January, the revision of anti-money laundering regulations officially took effect, bringing digital asset trading into the realm of criminal law, marking an upgrade from administrative penalties to judicial deterrence. The regulations require financial institutions to strengthen KYC (Know Your Customer) reviews, and any cross-border remittances involving crypto must be reported. This directly impacted the overseas layouts of Chinese-funded enterprises; for example, some A-share tech companies that previously held Bitcoin indirectly through Singapore or Cayman subsidiaries now face stricter audit requirements. The China Securities Regulatory Commission subsequently strengthened the disclosure requirements for listed companies regarding digital asset risks at the beginning of the year, making many enterprises tread carefully: a fintech company listed in Shanghai was questioned during an audit for holding a small amount of Ethereum through its subsidiary and ultimately chose to divest assets to avoid delisting risks.
The turning point in policy evolution occurred in July 2025 when the Shanghai Financial Regulatory Bureau held a special meeting to discuss the impact of international stablecoin dynamics on China. Although the meeting minutes were not publicly released, versions circulated in the industry indicated that regulators were particularly concerned about the RWA model—tokenizing domestic real estate or bonds onto overseas blockchains. This innovation could enhance asset liquidity but was seen as a "gray area" for evading capital controls. Subsequently, on September 24, a Caixin report revealed the tip of the iceberg: various Chinese-funded institutions were required to shrink their crypto businesses in Hong Kong, including investment, trading, RWA issuance, and stablecoin-related activities. This was not sudden but rather the implementation of prior warnings. The report pointed out that internet platforms like Alibaba, Chinese-funded brokerages like CITIC Securities, and banks like Bank of China Hong Kong all became key targets. The fundamental reason is to prevent systemic risks: binding dollar stablecoins could lead to dependency issues, especially in the context of escalating Sino-US trade frictions.
This policy directly triggered a chain reaction. Taking the "financial treasury company" model as an example, this strategy of leveraging investments in digital assets through Hong Kong subsidiaries was popular among Chinese-funded enterprises in Hong Kong in 2024. Many companies announced purchases of Bitcoin, hoping to boost their stock prices as the coin price rose. However, the restrictions in September 2025 abruptly halted this. A typical case is a Hong Kong-listed real estate developer that announced at the end of 2024 an investment of hundreds of millions of dollars in Bitcoin as a "strategic reserve." This briefly boosted its stock price, but by mid-2025, under regulatory guidance, the company was forced to sell part of its holdings, leading to a decline of over 10% in its stock price. This incident was not an isolated case; similar Chinese-funded mining transformation companies also faced the same pressure, highlighting the shift in policy from "post-event accountability" to "pre-event intervention."
Overall, the regulatory evolution in mainland China this year reflects a "penetrating" approach: not limited to domestic issues but extending to Hong Kong and overseas Chinese-funded institutions. This resonates with global trends—such as the implementation of the EU's MiCA regulations—but places greater emphasis on local risk prevention. For A-share listed companies, this means that Web3 layouts must be strictly limited to applications of blockchain technology, such as supply chain traceability, rather than crypto trading. Violations have occurred frequently: in April 2025, a Shenzhen-listed gaming company was interviewed by the CSRC for issuing NFTs, ultimately delisting the product and being fined millions.
In contrast to the strictness of mainland regulations, Hong Kong continued to play the role of a "testing ground" this year, but signs of tightening began to emerge in policy evolution. On August 1, 2025, the "Stablecoin Ordinance" officially took effect, with the Hong Kong Monetary Authority (HKMA) emphasizing that issuers must hold 100% reserve assets and deposit them with authorized banks. This was an improvement over the 2024 draft, aimed at attracting international players while preventing money laundering. After the ordinance took effect, it immediately attracted multiple applications: for example, Circle (the issuer of USDC) submitted a license application, marking Hong Kong's transformation into a stablecoin-friendly jurisdiction. However, this openness is not without boundaries—the ordinance explicitly prohibits promoting to mainland residents, and reserve assets must avoid excessive reliance on the dollar to coordinate within the "one country, two systems" framework.
In the first half of 2025, Hong Kong's regulatory pace accelerated. In January, the Securities and Futures Commission (SFC) optimized the licensing process for VASPs (Virtual Asset Service Providers), shortening the approval time to three months. This stimulated a wave of applications: by early July, 11 platforms had been approved, including local and overseas exchanges like HashKey and OKX's Hong Kong branches. The SFC's logic is to filter risks through the licensing system, promoting Hong Kong as a Web3 hub. However, tightening signals gradually emerged during this process: in February 2025, the SFC updated the guidelines for virtual asset activities of intermediary institutions, allowing brokerages to provide VA services to existing clients but adding a "knowledge assessment" requirement to ensure investors understand the risks. This directly impacted Chinese-funded brokerages, such as Haitong International, whose crypto trading services required additional scrutiny.
The climax of the policy occurred in July 2025 when the Financial Services and the Treasury Bureau (FSTB) and the SFC jointly released a consultation document proposing to extend licensing to digital asset dealers and custodians. This is a continuation of the 2024 OTC (over-the-counter) consultation, covering all VA trading and custody services. The proposal emphasizes that custodians must adopt a separation of hot and cold wallets and conduct regular audits to prevent hacking. In August, the SFC issued a circular on custody standards for VA trading platforms, outlining expectations for the secure custody of client assets, including insurance coverage and emergency plans. This reflects a response to earlier incidents: in November 2024, an unlicensed OTC shop was investigated for money laundering suspicions, leading multiple Chinese-funded institutions to conduct self-examinations.
On the case level, Hong Kong's law enforcement actions have become more targeted. In June 2025, the SFC revoked the licenses of three platforms for failing to comply with anti-money laundering regulations. One of these involved a Chinese-funded stablecoin issuance platform, whose violation was promoting services indirectly to mainland users. This case originated from user complaints, and the SFC's investigation found that the platform circumvented restrictions through WeChat groups, ultimately resulting in a fine of 5 million Hong Kong dollars and mandatory closure. This not only deterred the market but also affected Hong Kong-listed companies: several Chinese-funded tech stocks, such as Tencent Holdings, which had originally explored RWA pilot projects through their Hong Kong subsidiaries, chose to pause after the revocation incident to avoid touching mainland regulations.
Another notable case is the Bybit incident. In February 2025, this global exchange suffered a hacking attack, resulting in a loss of $1.5 billion in digital assets. Although Bybit is not based in Hong Kong, the incident prompted the SFC to strengthen custody requirements. Chinese-funded institutions were affected: a Hong Kong-listed financial group, whose subsidiary held Bybit assets, saw its stock price drop by 5% after the incident and shifted to a licensed platform under SFC guidance. This highlights the double-edged sword of Hong Kong's policy evolution: on one hand, the listing of Bitcoin spot ETFs in April 2024 (such as Harvest and ChinaAMC products) attracted billions of dollars in funds; on the other hand, the additional constraints on Chinese-funded institutions—such as the mainland's requirement to shrink operations in September—made it difficult for large companies to layout DAT (such as digital asset technology investments).
The regulatory narrative in Hong Kong this year is a transition from an open framework to refined management. The SFC's initiatives, such as the advancement of the ASPI-Re roadmap, support RWA infrastructure, but Chinese-funded listed companies need to build a "firewall" to isolate mainland operations. This aligns with global trends—such as similar licensing expansions in Singapore—but places greater emphasis on coordination with mainland China.
The interaction between mainland and Hong Kong policies has directly reshaped the crypto ecosystem of A-share and Hong Kong-listed companies. For A-share enterprises, the high-pressure environment this year means that Web3 layouts mostly remain at the conceptual stage. Taking RWA as an example, the contraction requirements in September 2025 led many real estate stocks (such as Vanke A shares) to abandon attempts at overseas tokenization and instead focus on digital renminbi applications. In terms of stablecoins, financial institutions like the Industrial and Commercial Bank of China are prohibited from any related services, with high risks of violations. A typical case is a Shenzhen-listed payment company that attempted a stablecoin cross-border pilot at the end of 2024, but after the regulations took effect in January 2025, the project was shelved, leading to increased stock price volatility.
Hong Kong-listed Chinese-funded companies face a "dual balance": benefiting from Hong Kong's ETF and licensing wave but constrained by mainland guidance. The end of the "financial treasury company" model is the most direct impact of this year. Many companies, such as Xiaomi Group (Hong Kong stock), had announced purchases of digital assets to hedge against inflation, but after the restrictions in 2025, they had to sell their holdings, affecting quarterly performance. DAT layouts were also impacted: Tencent and Alibaba's blockchain subsidiaries in Hong Kong could have expanded into DeFi but are now limited to non-crypto fields. In one case, a Chinese-funded brokerage in Hong Kong, after being approved for VA trading qualifications, became a regulatory focus and ultimately suspended direct Bitcoin trading, leading to noticeable customer losses.
These changes are not entirely negative. For companies adept at compliance, there are opportunities: such as indirectly participating through licensed platforms in Hong Kong, enhancing global competitiveness. However, risk management is crucial: listed companies need to strengthen disclosures and establish internal audit mechanisms to avoid cross-border loopholes.
Looking ahead, crypto regulation in the Chinese-speaking world will continue to navigate the tension between innovation and stability. Mainland China may explore limited openings based on CBDC (central bank digital currency), while Hong Kong may further expand licensing, but the "red lines" for Chinese-funded institutions will not loosen. The policy evolution and cases of this year remind enterprises that digital assets are not a shortcut but a long-term game that needs to be embedded within a compliance framework. Ultimately, the wisdom of regulation lies in guiding rather than stifling, allowing the Chinese-speaking world to secure a place in the global Web3 landscape.
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