Shenzhen warns of stablecoin -welder while the neighboring Hong Kong pushes forward

Authorities in Shenzhen published a public alert on Monday and residents warned to prevent scam with Stablecoins, referring to an increase in illegal fundraising and fraud linked to Crypto.

“Recently, Stablecoins received widespread attention from the market,” the task group of the city of illegal financial activities said. “Monitoring showed that some illegal institutions use ‘financial innovation’ and ‘digital assets’ as gimmicks and benefit from the lack of understanding of the public of Stablecoins.”

The Task Force warned that those activities are bound by illegal fundraising, gambling, fraud, pyramid schemes and money laundering. The public was encouraged to report such incidents to the authorities, with benefits available for tips.

Despite official prohibitions that limit access to crypto, trade remains widespread in China. It also remains an important vector for scams that focus on both mainland citizens and victims abroad. Chinese organized crime groups also run scammers of syndicates in Southeast Asia.

The Shenzhen Alert follows a post of 30 June on Weibo by Chinese e-commerce giant jd.com, warning Users about fake promotions from a “JD Stablecoin”. It is unclear whether the Shenzhen -warning is specifically linked to that result.

The company, that’s in search of Licenses to issue Stablecoins abroad for business-to-business payments clarified that no official coins have been released. All claims of the opposite, according to her, are fraudulent.

On Monday, the Hong Kong Economic Journal Also published An article about an alleged Ponzi schedule called Xin Kang Jia, which among other things disguised himself as a Stablecoin investment platform. It has attracted two million victims since its foundation in the Chinese province of Guizhou in 2021, which resulted in 13 billion RMB ($ 1.8 billion) in loss of investors.

A short walk

Yet, across the border in Hong Kong, from Shenzhen – where visitors can walk between the two cities – regulators take a different approach.

The city is preparation To implement a new regulatory framework for Stablecoins in August. Only licensed companies are allowed to issue users of FIAT-referred to the market to users.

Financial secretary Paul Chan confirmed the support of Hong Kong for the sector last month and linked the development of Stablecoin to Asia, and in particular China, the growing interest in arranging trade in local currencies instead of American dollars.

Stablecoins, he said, “offer a cost -effective alternative to the traditional financing system,” and could reform cross -border payments and capital markets.

Sean Lee, co-founder of Digital Asset Tech Company Ida, said Decrypt That the Hong Kong regulation “is very progressive compared to other areas of law.”

“It leaves more openness from the perspective of an international markets, which means that the issue of multiple currency versus only local currencies such as VAE is possible, and also the acceptance of the use of public networks,” he said.

“However, it has put a fairly high bar for market input.”

For now, Hong Kong’s focus is more on the use of business-to-business than on retail applications, a trend echoed in the Stablecoin plans of JD.com and those of other companies and banks that explore the technology.

That shift is partly due to public unfamiliarity with stablecoins, Lee added. “The domestic digital payment is also extremely advanced here.”