New Era of Overseas Expansion: Domestic Payment Institutions that “Enter” Stablecoins

Web3.0 can be said to be a hot topic for domestic payment institutions in the past two years, from NFT, Metaverse to cryptocurrency, especially stablecoin-related content. Since the domestic ban on cryptocurrency-related industries in 2021, cryptocurrency has once withdrawn from the vision of domestic payment institutions. However, with the increasing demand for stablecoins in global trade, international and domestic payment giants have once again intensified their attention to stablecoin payments. So which domestic licensed payment institutions have "entered" stablecoins? What issues are worth paying attention to?

1. Prohibition

In September 2021, the People's Bank of China, the Cyberspace Administration of China, 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, the State Administration of Foreign Exchange and other ten ministries and commissions jointly issued the "Notice on Further Preventing and Dealing with the Risks of Virtual Currency Trading Speculation". The notice clearly stated that virtual currency-related business activities are illegal financial activities, and that overseas virtual currency exchanges providing services to residents in my country through the Internet are also illegal financial activities.

The joint release of so many departments means that almost all virtual currency-related market activities are prohibited. So far, there are no updated laws and regulations to lift the ban or further explain it. This makes it illegal for all virtual currency businesses to operate in mainland China or serve residents in the country.

Before this, major companies have also expressed their relevant positions.

In 2018, Tencent stated that it has always adhered to the principle of resolutely not providing related services for illegal financial activities such as "issuance of ICO tokens at home and abroad, virtual currency transactions", including not providing related payment channels, advertising services and other businesses. In addition, Ma Huateng made it clear during the two sessions that year that Tencent would not issue virtual currency, because blockchain is still in its early stages of development and needs to establish an effective application model, and once the currency is issued, it will cause a series of regulatory issues. But Tencent has actually never stopped exploring blockchain technology and its applications.

In June 2021, Alipay also issued a statement prohibiting the use of the company's services for virtual currency transactions such as Bitcoin, while continuing to carry out comprehensive inspections and crackdowns on virtual currency transactions.

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

2. Enter the game

Under the ban in mainland China, many companies that want to get involved in cryptocurrency have reached a consensus that they should not conduct business in mainland China, serve mainland Chinese residents, or even touch any RMB-related business. At present, there are clear signs that the affiliated companies of licensed payment institutions that have entered cryptocurrency-related businesses overseas include JD.com (Online Banking), Ant Group (Alipay), LianLian, YeePay, etc.

In July 2024, the Hong Kong Monetary Authority announced the first batch of "Stablecoin Issuer Sandbox", including five institutions including JD CoinChain Technology (Hong Kong) Co., Ltd. With the permission of the Hong Kong government, JD's affiliated companies actually participated in the research and development of stablecoins. Its official website shows that JD's stablecoin is about to be launched. JD's stablecoin is pegged to the Hong Kong dollar (HKD) at a 1:1 ratio. It is based on a public blockchain and aims to become one of the leading digital currencies for enterprises and individuals seeking efficient, economical and secure payment solutions.

Soon after, AirstarBank, a subsidiary of Xiaomi (whose payment institution is Jifu Ruitong), announced its cooperation with JD Coin Chain to explore cross-border payment solutions for enterprises based on stablecoins. Therefore, Xiaomi is also openly involved in stablecoin payments.

In addition, in August 2024, Ant International launched a pilot project of "DBS Treasury Tokens" in cooperation with DBS Bank to improve treasury and liquidity management. The pilot runs on its permissioned blockchain, facilitating Ant International's multi-currency treasury and liquidity management in various markets.

In December 2024, LianLian Digital's wholly-owned subsidiary DFX Labs obtained the Hong Kong VATP virtual asset trading platform license.

There is another Web3.0 enterprise with the "gene" of Yibao, which has also received high attention in recent years, that is Kun. In February 2025, Kun just announced that it had obtained a seed round of financing of tens of millions of US dollars. Its official industry positioning is to solve the challenges faced by cross-border payments by building and operating a compliant bridge between stablecoins and legal tender systems. It can be simply understood as doing the acceptance business between stablecoins and legal tender.

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

Officially, Kun is YeePay's overseas ecological partner, and Kun's chief consultant is Yu Chen, president of YeePay. Regarding the relationship between Kun and YeePay, Yu Chen said: "This brand has nothing to do with YeePay. YeePay operates compliant businesses under the supervision of the central bank, and has another system for overseas business."

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

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

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

The above-mentioned institutions’ actions in entering the cryptocurrency and stablecoin market can be understood through public information. However, most institutions have not made much exposure to the stablecoin payment industry, or the time has not come yet.

3. Doubt

Top institutions issue coins, mid-level institutions build trading platforms, and small institutions conduct OTC transactions.

This seems to have become the basic judgment for major institutions to enter the stablecoin payment industry. However, more institutions that are observing and waiting are thinking about when to enter the market, how to cut risks, and how to gain customer trust in the new industry.

When to join the game. From the perspective of international regulations, financial centers such as the United States and Hong Kong, China are formulating laws and regulations related to stablecoins. When they will be officially issued and how to develop the business have become the focus of many people. In addition, based on the payment needs of goods trade, many payment companies are also observing the overall customer demand for stablecoin payments, and then making the next layout. Although some institutions have not taken any action on the surface, they are still more or less involved in stablecoin-related industries abroad based on customer needs.

Risk isolation. Based on the ban on virtual currencies in mainland China, the best risk isolation measure is that both new companies and new products have no connection with mainland China. Currently, the more popular way is to set up independent companies in Hong Kong, Singapore and other places, complete the acceptance of stablecoins and legal tender, and then conduct mature legal tender cross-border payments.

Customer trust. When setting up a new company overseas to conduct business, new trust issues arise. After all, if the new company has no connection with the mainland China company, customers may worry that the company may run away with the money. However, if the company is too close to the mainland China company, compliance issues may arise. How to properly handle the ambiguous relationship between the old and new formats is also a test of the wisdom of payment companies.

"In Web2.0 you can only make payments, but in Web3.0, you can play any financial role." Many practitioners have expressed such sentiments as the relevant regulatory measures for Web3.0 are still imperfect.

From the trend point of view, in the process of Web2.0 and Web3.0 integration, stablecoin payment-related industries need to gain wider recognition and must be more compliant. The important underlying logic of finance is the transmission of trust, and having government endorsement, actively embracing supervision, and issuing licenses is the most direct way.

But before that, you can do anything unless prohibited by law, because my destiny is in my own hands.