Seeds of Wisdom RV and Economics Updates Monday Afternoon 10-20-25

EconomicsNews

Oct 20

Written By DINARRECAPS8

Good Afternoon Dinar Recaps,

When Innovation Meets Control: China’s Pause on Hong Kong Stablecoins

Ant Group and JD.com halt plans after Beijing asserts monetary authority.

Overview

Two of China’s biggest tech giants — Ant Group and JD.com — have paused their plans to issue stablecoins in Hong Kong, following quiet guidance from Beijing regulators. The decision underscores growing tension between China’s drive for digital innovation and its insistence on state control over currency.

According to the Financial Times, both firms received instructions from the People’s Bank of China (PBoC) and the Cyberspace Administration of China (CAC) to suspend their Hong Kong initiatives. The question, said one source, is simple but fundamental: “Who has the right to issue money — the central bank or private firms?”

The Setback for Hong Kong’s Fintech Ambitions

Hong Kong launched its stablecoin licensing regime in August to attract Web3 and tokenization projects. Initially, mainland officials saw it as an opening to promote renminbi-pegged tokens and boost the yuan’s international use.

But enthusiasm cooled fast. Regulators in Beijing reportedly grew uneasy as some stablecoin ventures posted double-digit losses shortly after the rules took effect. China’s securities watchdog then instructed several brokerages to pause real-world asset tokenization as well — another signal that the central government is tightening oversight of digital-asset experiments.

Why It Matters

This pause reveals three critical themes shaping the region’s financial future:

Monetary Sovereignty: Beijing’s priority is clear — control over money creation must stay with the state. Private stablecoins could blur that line and compete with the digital yuan (e-CNY).
Testing the Limits of Hong Kong’s Autonomy: While Hong Kong markets itself as Asia’s Web3 hub, this episode shows how quickly mainland policy can override its local fintech initiatives.
Signal to Global Markets: China’s stance adds to a broader global shift where governments seek tighter reins on privately issued digital money, balancing innovation with systemic risk.

The Bigger Picture

China is not retreating from digital finance — it’s redefining who leads it. The pause on stablecoins doesn’t end tokenization efforts but re-centers them under state-linked or bank-controlled entities, keeping fintech aligned with national strategy.

For global investors, it’s a reminder that in modern finance, innovation operates within political boundaries.

This is not just politics — it’s global finance restructuring before our eyes.

Seeds of Wisdom Team
Newshounds News™ Exclusive

Sources

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Global Financial Order Under Strain as Geopolitical Fragmentation Deepens
The end of postwar financial integration may be closer than expected.

A Fracturing Monetary Landscape

A new report from the Centre for Economic Policy Research (CEPR), the 28th Geneva Report on the World Economy, warns that rising geopolitical tensions are eroding the foundations of the global financial system that has existed since World War II.

According to the report, strategic competition—particularly between the West and China—combined with sanctions and protectionist measures is accelerating international financial fragmentation.
This fragmentation marks a departure from the decades-long era of liberalized, rules-based globalization that once defined international finance.

From Integration to Geoeconomic Fragmentation

The authors of the Geneva Report argue that the “deep global financial integration without regard to geopolitics” that characterized the postwar era is being replaced by a period of “geoeconomic fragmentation.”

This transition is visible in three key areas:

Capital Flows: Investments are increasingly concentrated within geopolitical blocs, reducing global allocative efficiency.
Crisis Response: Coordination among major economies has weakened, limiting joint responses to shocks such as banking crises or currency volatility.
Policy Divergence: Sanctions, reshoring, and “friend-shoring” are reshaping both trade and financial networks.

Why This Matters

The implications reach far beyond finance:

For businesses, the rise in geopolitical barriers means greater uncertainty in global supply chains, volatile exchange rates, and tighter cross-border investment conditions.
For governments, fragmentation introduces instability into crisis management and capital allocation, increasing the risk of systemic shocks.
For emerging markets, the challenge is most acute — nations may face pressure to align with specific blocs or risk exclusion from capital access and payment systems.

What to Watch

Alternative Payment Systems: Will BRICS and other regional blocs develop competing financial infrastructures to the U.S. dollar system?
Alliance Consolidation vs. Openness: Do states double down on bloc-based cooperation or attempt to sustain a degree of global openness?
Emerging Market Realignment: How developing economies navigate these rival frameworks may shape the next decade of financial globalization.

Seeds of Wisdom Team
Newshounds News™ Exclusive

Source