SS #41 - China's PBoC Overrides HK Stablecoin Plans

📢 Sponsor | 💡 Telegram | 📰 Past Editions

Good morning! We hope you had a productive weekend.

As October draws to a close, the stablecoin sector is seeing significant, contrasting moves out of Asia. On one hand, China's regulatory hammer has dropped as the People's Bank of China (PBoC) ordered major tech giants like Ant Group and JD.com to halt their plans for yuan-pegged stablecoins in Hong Kong, effectively overriding the territory's new licensing regime.

Conversely, Japan’s financial heavyweights are leaning in. The nation's three megabanks: Mitsubishi UFJ (MUFG), Sumitomo Mitsui (SMBC), and Mizuho are collaborating to launch stablecoins pegged to both the Japanese Yen and the U.S. Dollar. This monumental effort aims to establish a shared standard for corporate clients and critical cross-border payment rails, signaling serious intent from traditional finance to embrace tokenized fiat.

The East Asian stablecoin landscape is clearly heating up. While we track these major regulatory and institutional shifts, we're also keeping an eye on attractive opportunities, including notable yields like those from Midas. As a Stablescope subscriber, rest assured you will receive all the most critical and timely updates on the stablecoin sector.

Enjoy the read!

Let us know what sort of coverage you would like to see from the new publication.

If you know anybody who would benefit from this content, please help us spread the word!

In Today's Edition:

• Headline: China's PBoC Overrides HK Stablecoin Plans

• Quick Bites: Tempo Raises $500M Series A at a $5B Valuation

• Yield of the Week: 44.10% APY on Midas

You read and share. We listen and improve. Send us feedback at [email protected].

TOGETHER WITH

Neutrl Vault Pre-Deposit Round Closes: $75M Cap Filled in Under 40 Minutes

The Neutrl Pre-Deposit Vault, featuring the K3 Capital-curated stablecoin strategy, has officially closed.

Demand for this exclusive opportunity proved to be unprecedented. Despite encountering technical friction related to an AWS service issue, the final $75M capacity was fully subscribed in under 40 minutes.

This rapid close underscores the market's high confidence in the strategy's core offering:

1. A market-neutral strategy actively curated by K3 Capital.

2. Real, on-chain yield on Plasma infrastructure.

3. Immediate accrual of Neutrl Points and a share of the large 450,000 XPL incentive pool.

While the Pre-Deposit Vault is now closed, this event marks a powerful milestone leading up to the full protocol launch. Follow Neutrl for the next steps and future opportunities.

HEADLINE

China's PBoC Overrides HK Stablecoin Plans

State of play: Chinese regulators, led by the People's Bank of China (PBoC), have ordered major tech firms like Ant Group and JD.com to halt their plans to issue yuan-pegged stablecoins in Hong Kong, overriding the territory's new licensing regime.

• Beijing's primary concern is that privately issued stablecoins pose a challenge to the central bank's authority and could undermine the state-backed digital currency, the e-CNY.

• The intervention demonstrates that, despite Hong Kong's efforts to position itself as a crypto hub with its new stablecoin licensing regime, mainland regulatory concerns on financial stability and monetary control take precedence.

• The directive is part of a wider regulatory tightening, with Chinese authorities also advising brokerages to pause real-world asset tokenization work and stop publishing pro-stablecoin research in Hong Kong.

What’s Next: Hong Kong's stablecoin strategy will now pivot away from the Yuan to focus on USD-pegged assets, while Beijing intensifies its push for the e-CNY, ceding a competitive edge to other Asian crypto hubs.

Why it Matters: This is a stark reminder that national governments, particularly China, prioritize absolute monetary control over crypto innovation. It significantly limits Hong Kong's potential as a major crypto hub and reinforces the geopolitical divide between state-controlled CBDCs and private stablecoins.

Our Take: Beijing has asserted the state's exclusive right of coinage, closing the door on a major offshore Yuan stablecoin opportunity; Strategy: Investors should pivot to HK-licensed USD stablecoins and non-fiat-backed DeFi solutions, as state power dictates the scale of stablecoin ambition.

QUICK BITES

• Tempo raises $500M Series A at a $5B valuation.

• NYDIG says stablecoins $1 peg Is a misconception.

• KPMG says stablecoins can cut cross-border payments cost by 99%.

• Michael Barr warns of gaps in recently passed GENIUS stablecoin law.

• Japan's big banks join forces on stablecoins to speed corporate payments.

• Tether open-sources wallet kit for humans and AI agents on Bitcoin, Ethereum, and beyond.

• Canaccord says stablecoins surge to record $314B market cap as institutional race heats up.

• BlackRock to launch GENIUS-compliant money market fund tailored for stablecoin issuers.

YIELD OF THE WEEK

Midas mRe7YIELD: 44.10% APY

• mRe7YIELD is a yield product designed to execute market-neutral DeFi strategies across multiple blockchain ecosystems, including Ethereum, Etherlink, TAC, and 0G.

• The token can be minted using the major stablecoins USDC, USDT, and DAI, providing broad accessibility for users within the respective chains.

• The operational integrity and risk exposure of the underlying yield strategy are overseen by Re7 Labs, which functions as the designated Risk Manager.

Midas mHYPER: 32.65% APY

• mHYPER is structured to track the performance of market-neutral stablecoin yield strategies deployed across various on-chain ecosystems, including Ethereum and Plasma.

• Users can mint the token using a wide array of stablecoins, including USDT, USDC, DAI, USDS, and USDT0.

• The strategy's risk is actively managed by Hyperithm, and users are offered additional incentives through rewards from various protocols such as Hyperbeat, CAP, Lighter, USDai, Ethena, and Almanak.

Hyperbeat USDT: 69.42% APY

• The Hyperbeat USDT vault functions as an automated DeFi strategy providing users with a simple way to deploy their USDT within the HyperEVM ecosystem to generate real yield and earn partner incentives.

• Users have a choice between Instant Redemption, which allows immediate withdrawal with a 0.5% early fee when liquidity permits, and Classic Redemption, which is fee-free but takes up to three working days.

• The vault applies a 20% performance fee based on the duration of the fund's investment, and MEV Capital serves as the risk manager.

If you enjoy reading this issue, please consider subscribing. It takes 1 minute of your time, but it would mean the world to us 🙇

Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.