The New Landscape of Digital Stablecoins: Analysis of JD.com Stablecoin and Global Trends

Recently, there have been several landmark events in the field of digital stablecoins:

1. The U.S. Senate Committee has passed the first comprehensive regulation of stablecoins, the GENIUS Act.
2. The Hong Kong Legislative Council officially passed the digital stablecoin regulatory bill.
3. The attitude of mainland China towards the development of stablecoins is beginning to change.
4. Stablecoin issuer Circle successfully listed on the New York Stock Exchange.

In addition, it is widely believed in the industry that USD-pegged stablecoins are an extension of the dollar's hegemony in the digital realm, while HKD-pegged stablecoins may be an exploration of the internationalization of the Renminbi.

Although the JD stablecoin was issued in Hong Kong, it can still be seen as China's active attempt in the field of digital currency. This article will analyze the background, progress, and technical implementation of the JD Hong Kong stablecoin project, assess its impact on JD, Hong Kong, and mainland China, and explore the profit model of stablecoins, the policy environment, and global trends.

1. Overview of Current Progress

JD Group's JD Coin Chain Technology ( Hong Kong ) Limited is actively promoting the pilot issuance of Hong Kong Dollar stablecoin, aiming to enhance cross-border payment capabilities and serve the real economy. The project started at the end of 2023 when the Hong Kong Special Administrative Region government announced the establishment of a licensing system for stablecoin issuers. The JD team found that issuing payment-type stablecoins through blockchain can solve the difficulties of cross-border settlement and provide services to other enterprises.

JD.com was successfully selected as one of the first participants in the "stablecoin issuer sandbox" announced by the Hong Kong Monetary Authority (HKMA) in July 2024. Starting from the second half of 2024, JD.com stablecoin will enter the HKMA sandbox testing, currently focusing on retail and institutional users' applications on PC and mobile, targeting scenarios such as cross-border payments, investment transactions, and daily retail consumption.

JD.com maintains close communication with Hong Kong regulators and is also collaborating with regulatory authorities in other parts of the world to promote the global compliance expansion of stablecoin business. Currently, JD.com’s stablecoin has not yet been officially issued to the public, and the company emphasizes that there are no public purchasing channels available. According to the person in charge, the project is in the late stage of sandbox testing and is expected to be launched in the market after Hong Kong officially issues the license.

The overall timeline is as follows:

• End of 2023: Hong Kong establishes a regulatory framework for stablecoins.
• July 2024: JD enters the sandbox pilot
• May 2025: Hong Kong Legislative Council passes the Stablecoin Regulation
• Mid 2025: JD stablecoin completes multiple rounds of testing, issuance imminent.

In the process of advancing the project, JD closely cooperates with regulatory bodies and industry partners. Since the Hong Kong Monetary Authority launched the sandbox pilot in March 2024, it has received consultation applications from dozens of institutions. The first batch of institutions participating in the sandbox, in addition to JD, includes Yuan Coin Technology, which issues the Hong Kong dollar stablecoin "HKDR", and a joint venture project for the Hong Kong dollar stablecoin led by Standard Chartered Hong Kong. On the regulatory side, the Hong Kong Monetary Authority, the Financial Services and the Treasury Bureau, and others maintain communication with JD Coin Chain Technology to ensure project compliance. JD is also exploring cooperation opportunities with traditional financial institutions such as Standard Chartered Bank ( Hong Kong ) to jointly improve the application ecosystem of stablecoins.

It is worth noting that the Hong Kong financial regulatory authority officially implemented the "Stablecoin Ordinance" on May 30, 2025, marking a step closer for first batch pilot institutions such as JD.com to formal licensed issuance. With the support of the regulatory sandbox, the JD stablecoin project has progressed steadily, laying the foundation for the next phase of formal issuance.

2. Strategic Significance

For JD Group, issuing digital stablecoins has significant strategic value.

Stablecoins can serve as the payment infrastructure for JD's global business, addressing pain points in cross-border payment settlements. Liu Peng, CEO of JD Coin Chain Technology, stated that stablecoins possess certain currency attributes while also leveraging the technological advantages of digital assets, which can compensate for the significant volatility issues of traditional cryptocurrencies, thus emerging in the payment field. The positioning of JD's stablecoin is not limited to serving JD's own e-commerce ecosystem but is aimed at global enterprises and individuals, providing more efficient, low-cost, and secure payment solutions. By mastering the bridge between fiat currency and cryptocurrency exchanges, JD is expected to gain an advantage in areas such as cross-border e-commerce and overseas market acquiring settlements.

In addition, the issuance of stablecoins can bring resources and benefits to JD Finance's technology sector, such as earning interest on user deposit funds and enhancing the accumulation of transaction data.

Overall, stablecoin projects help reinforce JD's positioning as a technology-driven service enterprise and expand its footprint in fintech.

For Hong Kong as an international financial center, JD's choice to issue stablecoins in Hong Kong highlights the unique value of Hong Kong in the digital currency experiment.

The Hong Kong Special Administrative Region government has actively embraced the virtual asset and Web3 industry in recent years, striving to consolidate Hong Kong's position as an international financial center. The passage of the "stablecoin regulation" and the promotion of sandbox pilots have made Hong Kong the world's first jurisdiction to establish a comprehensive regulatory framework for fiat-backed stablecoins. This is of great significance to Hong Kong: firstly, as a representative of digital financial infrastructure, stablecoins are expected to enhance the innovation vitality and competitive advantage of Hong Kong's financial market; secondly, the stablecoin pilot has attracted participation from well-known domestic and foreign enterprises, including JD.com and Standard Chartered, driving capital market attention to related concepts; thirdly, by being the first to regulate stablecoins, Hong Kong can gain a certain degree of discourse power in international rule-making.

Analysis indicates that the development of stablecoins essentially extends the dominance of the US dollar into the crypto space. Those who set the rules can gain an advantage in the reshuffling of the future monetary system. Therefore, Hong Kong's bet on stablecoins is expected to play a key role in the new round of financial transformation.

The Hong Kong stablecoin experiment also has enlightening significance for the development of digital finance in mainland China.

Currently, Mainland China maintains a strict regulatory attitude towards cryptocurrencies and stablecoins, mainly promoting the implementation of the central bank digital currency ( digital RMB ). However, practices in Hong Kong indicate that stablecoins can serve as payment tools within a compliance framework rather than merely speculative assets, with the regulatory logic shifting to view them as financial infrastructure. A report by CITIC Securities suggests that the promotion of stablecoin legislation in Hong Kong and the U.S. will provide a stable trading medium for the tokenization of real assets, facilitating Mainland Chinese enterprises in launching real-world asset ( RWA ) projects in Hong Kong.

At the same time, the implementation of stablecoin policies is expected to indirectly boost cooperation between Hong Kong and the mainland in areas such as the construction of interfaces for cross-border settlement of the digital renminbi and supply chain finance. Liu Peng from JD.com also revealed that the team is actively researching the possibility of issuing stablecoins pegged to offshore renminbi, providing new tools for the cross-border circulation of the renminbi, but this requires communication with the mainland regulators.

It is foreseeable that the successful pilot of Hong Kong's stablecoin will provide a sample for the mainland's observation: on one hand, it verifies the actual benefits of digital currency in trade settlement and consumer payments; on the other hand, it compels the mainland to consider how to integrate the advantages of stablecoins into the future digital financial system under the premise of safety and controllability. For example, it cannot be ruled out that the future digital renminbi may reference the stablecoin mechanism to enhance cross-border usability and programmability, among other aspects.

In summary, the Hong Kong stablecoin project, as a "cutting-edge testing ground", will influence the direction of digital finance regulation and innovation in mainland China.

3. Technical Implementation

3.1 Technical Architecture and Underlying Chain Selection

JD stablecoin is issued using blockchain technology architecture and is a digital token based on the public chain (Public Blockchain). According to the project leader, JD stablecoin will be pegged to the Hong Kong Dollar (HKD), maintaining a stable value at a ratio of 1:1. This means that for every 1 JD stablecoin issued, there is a reserve asset of an equivalent 1 Hong Kong Dollar backing it.

Choosing a public chain as the underlying layer is to leverage the features of blockchain such as distributed ledger, peer-to-peer transmission, and programmability, to achieve transparent value transfer and rapid settlement. At the same time, adopting mainstream public chains helps to improve the compatibility of stablecoins, facilitating the integration of different wallets, trading platforms, and applications.

The specific name of the underlying public chain has not been announced yet, but it is speculated that it may be based on mature chains such as Ethereum or an upgraded version of JD's self-developed regulatory alliance chain architecture, in order to balance performance and compliance requirements.

3.2 Pegging Mechanism and Reserve Custody

As a fiat stablecoin, the JD stablecoin adopts a 100% fully reserved anchoring mechanism, meaning that each unit of the token has high-quality, highly liquid assets as reserves to ensure price stability and allow holders to redeem at face value.

According to information from the official websites of JD Coin Chain Technology and Yuan Coin Technology, the two upcoming Hong Kong dollar stablecoins are both pegged 1:1 to the Hong Kong dollar, with reserve assets consisting of highly liquid assets held in independent accounts at licensed financial institutions, and made available for external inquiry through regular disclosure reports. This means that the reserves of the JD stablecoin may primarily consist of cash and bank deposits, short-term government bonds, and other low-risk assets, stored in accounts with recognized custodial banks, isolated from the issuer's own funds. This custodial arrangement can prevent the issuer from misappropriating the reserves and protect the rights of the holders.

Hong Kong regulatory requirements state that stablecoin issuers must redeem holders' tokens at face value at all times. Therefore, JD's stablecoin has designed a comprehensive redemption mechanism: users can submit a redemption request, and the issuer promises to pay in fiat currency equivalent within a reasonable time. Meanwhile, the system will record the issuance and redemption processes through smart contracts or backend systems, ensuring that the on-chain token quantity corresponds in real-time with the reserve assets.

3.3 Cross-border Payment and Smart Contract Mechanism

One of the key technical implementations of JD's stablecoin is its application in cross-border payment scenarios.

With the peer-to-peer transmission characteristics of blockchain, fund settlement between two locations can bypass traditional multi-level intermediaries, achieving almost real-time arrival and reducing the handling fees and exchange rate costs of cross-border remittances. JD has revealed that the testing scenarios include cross-border trade payments and retail payments. For example, in cross-border e-commerce, overseas consumers can directly use JD's stablecoin for payments, saving on exchange fees compared to credit card channels; suppliers can also recover payments in a timely manner through stablecoins, accelerating capital turnover.

In addition, JD.com is testing stablecoin payments in connection with its online mall in Hong Kong and Macau, aiming to address the pain points of slow settlement and high fees that have previously existed in retail payments.

In terms of smart contract mechanisms, stablecoins are inherently programmable as blockchain tokens. This means that businesses can integrate stablecoins into smart contracts to achieve automated payments and financial innovation. For example, in supply chain finance, contracts can be written to automatically release stablecoin payments to suppliers once the logistics system confirms receipt. This reduces human intervention and credit risk. Additionally, in gaming or digital asset transactions, stablecoins can serve as a settlement medium, enabling instant clearing and profit-sharing through contracts.

JD stablecoin is expected to also support basic compliance features, such as blacklisting and freezing functions, to meet anti-money laundering and sanction requirements, similar to the practices of mainstream stablecoin USDC.

In terms of the overall technical solution, the JD stablecoin balances openness and compliance. By combining on-chain and off-chain methods, it leverages the advantages of blockchain for cross-border circulation and high availability, while also meeting regulatory requirements in areas such as reserve custody and information disclosure, laying a technical foundation for subsequent large-scale applications.

4. The Profit Model of Digital Stablecoins

( 4.1 Seigniorage and Interest Rate Income

The primary source of profit from issuing stablecoins is seigniorage or interest margin income.

Essentially, users holding coins exchange fiat currency for stablecoins, which is equivalent to the issuer obtaining a non-interest-bearing fund reserve. The issuer can invest this reserve in low-risk interest-bearing assets, thereby earning interest differentials.

Taking the global stablecoin example, due to rising interest rates in recent years, the profits of stablecoin issuers have surged. According to Circle, its issued USDC stablecoin had interest income of only $28 million in 2021, but is expected to skyrocket to $2.1 billion in 2023. This reflects that when interest rates rise, issuers holding large reserves can earn considerable interest income. Similarly, Tether )USDT issuer ### also reported astonishing profits—its net profit for the first half of 2023 reached around $2.2 billion, mainly from interest income on U.S. Treasury bonds held.

For JD.com