JD Digital Stablecoin Analysis Report

Digital stablecoins have become a hot topic in the fintech sector. Recent landmark events have highlighted their importance:

1. The U.S. Senate Committee has passed the GENIUS Act, which is the first comprehensive regulatory framework for stablecoins.
2. The Hong Kong Legislative Council officially passed the digital stablecoin regulation bill.
3. Former Deputy Governor of the Bank of China, Wang Yongli, called for greater attention to be paid to the development of stablecoins in mainland China.
4. The stablecoin company Circle went public on the NYSE, with its stock price soaring 168% on the first day.

There are also views in the industry that stablecoins pegged to the US dollar extend the dominance of the dollar, while stablecoins pegged to the Hong Kong dollar may become a way for the internationalization of the renminbi.

JD's issuance of stablecoins in Hong Kong is a positive exploration by China in the field of digital currency. This article will analyze the background, progress, and technical implementation of JD's stablecoin project, assess its impact, and discuss the profit models, policy environment, and global trends of stablecoins.

1. Current Progress Overview

JD Coin Chain Technology is actively promoting the pilot issuance of Hong Kong dollar stablecoin, aiming to enhance cross-border payment capabilities and serve the real economy. In July 2024, JD was selected as one of the first participants in the Hong Kong Monetary Authority's "stablecoin issuer sandbox". Currently, the project is in the later stage of sandbox testing, focusing on scenarios such as cross-border payments, investment transactions, and daily retail consumption.

JD.com maintains close communication with Hong Kong regulatory authorities to promote the global compliance expansion of stablecoin business. The project timeline shows: end of 2023 Hong Kong establishes regulatory framework → July 2024 enters sandbox pilot → May 2025 Legislative Council passes the bill → Mid-2025 completes multiple rounds of testing, issuance imminent.

2. Strategic Significance

For JD.com, stablecoins can serve as the payment infrastructure for its global business, addressing the pain points of cross-border settlements. It not only serves JD.com’s own e-commerce ecosystem but also provides efficient payment solutions for global enterprises and individuals. This helps to reinforce JD.com’s positioning as a technology-driven service enterprise.

For Hong Kong, the stablecoin pilot highlights its position in digital financial innovation. Hong Kong has become the world's first jurisdiction to establish a comprehensive regulatory framework for stablecoins, and is expected to gain a voice in the formulation of international rules.

For mainland China, Hong Kong's practice provides a sample for observing the actual benefits of stablecoins in payment settlement. This may encourage the mainland to consider how to integrate the advantages of stablecoins under the premise of security, influencing the future direction of digital financial regulation and innovation.

3. Technical Implementation

3.1 Technical Architecture and Underlying Chain Selection

JD's stablecoin adopts a blockchain technology architecture and is issued based on a public chain. Each stablecoin is backed by 1 Hong Kong dollar in reserve assets, maintaining a 1:1 peg. Choosing a public chain helps improve compatibility and accessibility. The specific underlying chain has not yet been announced and may be based on a mature public chain or upgraded from a self-developed regulatory alliance chain.

3.2 Anchoring Mechanism and Reserve Custody

Adopt a 100% full reserve mechanism, with reserve assets consisting of highly liquid assets stored in independent accounts at licensed financial institutions. Design a comprehensive redemption mechanism, allowing users to submit redemption requests, with the issuer committing to timely payouts. The system records the issuance and redemption processes through smart contracts or backend systems, ensuring that the number of on-chain tokens corresponds in real time with the reserve assets.

3.3 Cross-border Payment and Smart Contract Mechanism

Utilize the peer-to-peer transmission characteristics of blockchain to achieve near real-time cross-border fund transfers, reducing transaction fees and exchange rate costs. Test scenarios include cross-border trade payments and retail payments. Stablecoins can be integrated into smart contracts to enable automated payments and financial innovations, such as automatic settlement in supply chain finance. It is also expected to support blacklist and freezing functions to meet compliance requirements.

4. Profit Model of Digital Stablecoins

4.1 Seigniorage and interest income

The main source of profit is the investment income from reserves. Taking global stablecoins as an example, Circle's USDC interest income is expected to reach $2.1 billion in 2023. If JD's stablecoin issuance scale reaches billions, even low-risk investments can yield considerable returns.

4.2 Value-added Services and Ecological Effects

You can earn income through trading fees, cross-border settlement value-added services, supply chain finance, and more. Stablecoins can also enhance user stickiness, promote data accumulation, and indirectly create value. In the long run, stablecoins have strategic significance for the payment landscape and financial ecosystem, consolidating JD's infrastructure position in the cross-border e-commerce and digital finance sectors.

5. The Policy Environment in Hong Kong

5.1 Stablecoin Regulations and Licensing System

In May 2025, Hong Kong passed the "Stablecoin Ordinance," establishing a licensing system. The main provisions include:

• Reserve asset management: requires sufficient and highly liquid reserves, kept segregated from client funds.
• Redemption obligation: Licensed issuers must ensure timely redemption at par value.
• Risk and Compliance: Must meet anti-money laundering requirements, regularly disclose reserve status, and accept audits.

After the implementation of the regulations, Hong Kong only allows licensed institutions to sell stablecoins, and only licensed issued stablecoins can be offered to retail investors.

5.2 Sandbox Policy and Latest Developments

Hong Kong guides the development of stablecoins through a regulatory sandbox. In July 2024, the first batch of pilot lists was announced, including three entities, among which is JD.com. The sandbox allows selected institutions to test their solutions and communicate with regulators in both directions. After the regulations come into effect in May 2025, the Hong Kong Monetary Authority will further issue consultation documents to formulate detailed regulatory guidelines.

5.3 Coordination of regulatory agencies and details of the licensing system

Stablecoins are primarily regulated by the Monetary Authority, in coordination with the Securities and Futures Commission. Under the new regulations, only licensed banks, payment instrument institutions, or companies with special approval can provide stablecoin services. License applications must meet requirements such as capital and business plans. Recently, Hong Kong has also been exploring cross-border stablecoin cooperation, such as connecting with the Greater Bay Area and the mainland digital renminbi.

6. International Comparative Analysis

6.1 Global Regulatory Race and Trends

Major economies around the world are intensifying efforts to build a regulatory framework for stablecoins. A consensus is gradually forming: to view stablecoins as payment tools rather than purely speculative assets, and to develop regulatory logic with a financial infrastructure mindset.

6.2 United States: Regulatory Exploration and Market Practice Progressing Together

The U.S. Congress recently passed the GENIUS Act, establishing the first nationally unified regulatory framework for stablecoins. Prior to this, regulation relied mainly on existing financial rules. In the market, USDT and USDC account for about 90% of the global stablecoin market value. Payment giants like PayPal have also begun to enter the market. The U.S. is moving from a market-driven approach to the implementation stage of a regulatory framework.

6.3 Europe: MiCA regulations lead comprehensive regulation

The EU MiCA regulation will come into effect in phases from the end of 2024 to 2025, establishing detailed and strict requirements for stablecoins, including issuance licenses, reserve requirements, redemption rights, and operational restrictions. MiCA is seen as a global benchmark for stablecoin regulation, having a profound impact on issuers looking to enter the EU market.

6.4 Singapore: Clarification of Single Currency Stablecoin Standards

In 2023, Singapore released a new regulatory framework applicable to single-currency stablecoins pegged to the Singapore dollar or G10 currencies. Key requirements include 100% reserves, capital requirements, timely redemption, asset custody, and auditing. Singapore welcomes regulated stablecoin innovation while closely monitoring international developments and dynamically adjusting regulatory details.

7. Industry Giants Dynamics

PayPal has launched PYUSD, becoming the first dollar stablecoin issued by a major payment company. Its strategic goal is to integrate blockchain technology into mainstream payment networks to achieve low-cost cross-border transfers.

Stripe integrates stablecoin payments such as USDC, covering over 100 countries worldwide. Merchants can open stablecoin accounts to easily receive and hold USDC balances. Stripe has also acquired the stablecoin technology company Bridge in preparation for a possible self-issued coin.

Adyen has moved from observing to preparing, actively working on technical preparations to support stablecoin settlements. This reflects that traditional acquirers are being forced by the market to accept stablecoins as a new reality.

8. Conclusion

The development of digital stablecoins is no longer a question of "whether it is feasible," but rather "when will it fully prosper." As regulations become clearer in various countries, a new era for stablecoins is unstoppable.

Let's wait and see: Will JD.com usher in a new peak of development with the help of Hong Kong stablecoin? Or will a latecomer emerge, taking off from Hong Kong to compose a brand new legend of digital stablecoins?