China is gearing up for a notable re-entry into the cryptocurrency arena, with an initial focus on stablecoins and real-world assets. According to Dr. Xiao Feng, CEO of HashKey Group, the move signals a shift in the nation’s digital currency strategy. The announcement was made in Hong Kong, where the city appears set to spearhead Asia’s crypto evolution.
China’s Crypto Renaissance
Dr. Xiao’s statements come at a time when the global cryptocurrency landscape has been marked by volatility and regulatory scrutiny. Stablecoins, pegged to traditional currencies like the US dollar, offer a semblance of stability—a factor that has seemingly captivated Chinese regulators. “China’s cautious yet strategic approach to crypto could reshape the market dynamics in the region,” noted Li Wei, a blockchain analyst based in Beijing. As explored in our recent coverage of Interactive Brokers’ exploration of stablecoin launch, the interest in stablecoins is a growing trend among major financial players.
The pivot towards real-world assets (RWAs) like tokenized bonds and real estate presents intriguing possibilities. These assets are designed to bridge traditional finance with the burgeoning crypto world, potentially offering investors a new avenue for diversification. “It could be a game-changer,” enthused Wei, “as it aligns with China’s broader economic goals to digitize its financial infrastructure.”
Why Hong Kong?
Hong Kong’s role as a financial hub cannot be overstated. The city has long been a bridge between East and West, and its regulatory environment is perceived as more open compared to mainland China. According to Dr. Xiao, Hong Kong’s unique position makes it an ideal incubator for innovative financial products, including those involving digital currencies.
Local fintech startups have already begun to capitalize on this environment. “We’re witnessing a renaissance in financial innovation here,” said Sarah Chan, co-founder of a Hong Kong-based blockchain startup. The city appears poised to set the pace for Asia’s digital finance transformation, with supportive policies fostering a fertile ground for growth.
Historical Context and Market Trends
Historically, China’s relationship with cryptocurrencies has been tumultuous. The country banned initial coin offerings (ICOs) in 2017 and later cracked down on cryptocurrency exchanges. However, the government’s recent initiatives to explore a digital yuan and embrace blockchain technology suggest a nuanced approach to digital assets. This is a stark contrast to the heavy-handed restrictions of the past.
Market analysts are cautiously optimistic. The potential reintegration of China into the crypto space could inject significant liquidity and spark renewed interest from institutional investors. However, it’s not without its challenges. Regulatory clarity remains paramount, and the global crypto community is keenly watching how China navigates these waters. For a deeper dive into the technological advancements aiding stablecoin adoption, see our coverage of Alchemy’s latest upgrade.
What Lies Ahead?
As China inches closer to re-engagement, several questions linger. Will the embrace of stablecoins and RWAs catalyze a broader acceptance of cryptocurrencies in the region? Or will regulatory hurdles stifle innovation? For now, stakeholders are keeping a close eye on policy developments.
The crypto world has always been a realm of unpredictability, and China’s re-entry adds another layer of complexity. But it also brings a sense of excitement and anticipation. As Dr. Xiao puts it, “This is just the beginning of a new chapter for China and the global crypto landscape.”
In the coming months, all eyes will be on Hong Kong—and by extension, China—to see how these developments unfold. It’s a narrative filled with potential and uncertainty, and one that the crypto community will be following closely. The implications could be profound, not just for China, but for the entire digital currency ecosystem.
Source
This article is based on: Hashkey CEO: China Will Re-engage with Crypto, starting with Stablecoins and RWA
Further Reading
Deepen your understanding with these related articles:
- Voices of Crypto: Stablecoins Are Actually Working in 2025
- Stablecoins Clash: South Korea’s Biggest Parties Propose Rival Legislation
- EToro Plans to Tokenize U.S. Stocks on Ethereum in Blockchain Push
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
