JD can issue because it is sufficiently "like Hong Kong."

Written by: Portal Labs

On May 21, 2025, the Hong Kong Legislative Council passed the "Stablecoin Regulation Draft," paving the way for the compliant issuance of stablecoins in Hong Kong. Subsequently, the Web3 market, especially in China (Mandarin-speaking regions), has turned its attention to internet giants participating in the sandbox program.

Since June, news related to stablecoins led by JD has ignited discussions domestically. On June 17, according to Sina Finance, JD's Liu Qiangdong stated that JD hopes to apply for stablecoin licenses in all major currency countries globally to facilitate currency exchange between global enterprises. On June 18, JD Coinlink Technology CEO Liu Peng, in an exclusive interview with Bloomberg Businessweek, stated that the Hong Kong dollar and multi-currency stablecoins have been smoothly advancing in the Hong Kong Monetary Authority's "sandbox" testing, with expectations to officially obtain a license and launch in early Q4 this year.

As always, whenever there is favorable news from Hong Kong, there are many voices in the domestic market signaling "domestic openness," and this time is no exception. However, while expectations can exist, as practitioners, Portal Labs still believes that one should look beyond the surface and examine the underlying logic.

So, why can JD, as a Chinese internet giant, issue stablecoins? It must be because its underlying structure meets the conditions for stablecoin issuance in Hong Kong. (That's right, not China, but only Hong Kong.)

From the composition of the project itself, its compliance path, initiating entity, and business positioning are all very clear.

JD Stablecoin Project Entity

The reason JD can advance the stablecoin project in Hong Kong is that its underlying structure must meet the basic requirements of the Hong Kong Stablecoin Regulation for "issuer entities." According to the Hong Kong "Stablecoin Regulation Draft," issuers must:

• Be registered in Hong Kong;
• Have a paid-up capital of over HKD 25 million;
• Have stable financial and risk control capabilities;
• Maintain 100% high-quality, highly liquid asset reserves;
• Accept audit supervision and establish a clear redemption mechanism.

The establishment of JD Coinlink Technology Limited (JINGDONG Coinlink Technology Hong Kong Limited) is precisely to meet the institutional requirements of this regulatory container. The company is registered in Hong Kong, with JD Technology Group as its shareholder, possessing independent legal status, allowing it to isolate finances, assets, and operations from its parent company. This structural arrangement not only allows it to meet the basic qualifications of an issuer but also ensures that its business operations can independently carry out compliance responses during sandbox testing, risk assessment, and formal licensing processes.

From a compliance perspective, why not have JD Group directly apply for the license? The reason is that JD, as a large mainland group, cannot directly become a "locally registered issuer" under the Hong Kong Stablecoin Regulation. By establishing a wholly-owned subsidiary, it can achieve unified coordination in technology and resources while accepting supervision from the Hong Kong Monetary Authority as an independent entity, completing the legal relationship between the issuer and reserve custody, and compliance reporting.

This arrangement is fundamentally no different from Circle establishing Circle Internet Financial LLC as the issuer of USDC: the "issuer" must have an independently auditable legal identity to accept local regulatory and business penetration requirements, rather than relying on the overall qualifications of the parent company.

In other words, JD is not qualified to participate in the stablecoin sandbox because it is "in China," but because it is "in Hong Kong and meets Hong Kong regulatory requirements." This is the first principle of the project's establishment and a prerequisite for judging whether it can be replicated.

JD Stablecoin Project Design

Meeting the regulatory requirements for entity qualifications is only the starting point for compliant stablecoin issuance. The real key to "being able to issue" lies in design capability—whether an institution can build a regulated, auditable, and redeemable stablecoin issuance and operation system.

This capability is often reflected in three aspects: governance structure, funding capability, and infrastructure.

Governance Structure: Institutional Arrangement from Group Separation to Independent Risk Control

According to the Hong Kong "Stablecoin Regulation Draft," issuers must meet a series of regulatory requirements at the governance level: including establishing internal audit, risk control, and information disclosure mechanisms, and clearly defining the boundaries of board responsibilities and statutory regulatory obligations. The purpose is to treat the issuer as a quasi-financial institution, subject to scrutiny with a penetrable governance structure.

The reason JD Coinlink Technology can become a sandbox pilot institution is not merely because its parent company is an internet giant, but because it possesses a governance structure of a "quasi-financial issuer." From publicly available information, the company has an independent board structure in its statutory documents and complies with local Hong Kong laws for financial statement audits and daily regulatory reporting. This means that its issuance activities do not rely on the guarantees or reputation of the parent group but assume statutory responsibilities based on its "own governance system."

Funding Structure: Compliance Reserve Mechanism and High Credit Threshold

Hong Kong's regulatory requirements for stablecoin reserves are extremely strict: not only must they be 100% pegged, but they must also consist of "high-quality and highly liquid assets," such as Hong Kong dollars, bank deposits, and short-term government bonds, and establish dedicated custody accounts for asset isolation and auditing.

This threshold naturally excludes a large number of small and medium-sized crypto projects; only companies with ample funds and strong financial risk control capabilities can qualify. JD, as a large enterprise with abundant daily cash flow, has the ability to set up equivalent reserve accounts and collaborate with financial institutions for asset custody. It is understood that during the sandbox testing period, it has established a stablecoin exchange and redemption mechanism, promising users the ability to redeem fiat currency "at face value, with no additional fees," which aligns with the basic requirements in the draft.

More importantly, its stablecoin is not pegged to virtual assets but is collateralized by Hong Kong dollars or multiple currencies, further enhancing regulatory acceptability. The risk exposure behind this reserve mechanism is relatively controllable, clearly distinguishing it from solutions in the crypto market based on "algorithms" or "on-chain collateral."

Infrastructure Capability: Can It Independently Complete Clearing, Verification, and Compliance?

Issuing stablecoins is not a technological innovation but a reconstruction of "compliant financial facilities." Under the regulatory framework of the Monetary Authority, issuers must have clearing and settlement systems, identity verification processes, KYC/AML mechanisms, system audits, and emergency response capabilities. In short, stablecoins cannot simply be issued by writing a smart contract and attaching a front end; it is a system engineering project.

In this regard, JD has accumulated rich experience in B-end scenarios such as e-commerce payments, consumer finance, and cross-border settlements. Its subsidiary JD Digits has previously built multiple payment and account systems, capable of operating millions of financial users. This provides a natural infrastructure foundation for stablecoins. In other words, JD is not issuing "on-chain tokens," but a "financial tool" with a real redeemable mechanism.

In contrast, many crypto-native projects, even if they have licenses overseas, find it difficult to establish supporting infrastructure in actual operations, thus failing to meet Hong Kong's core requirement for "full-process controllability of the stablecoin system."

JD Stablecoin Business Scenarios

The core regulatory demand is not just "can you issue," but "after you issue, can you operate within the regulatory view." From this perspective, the use scenarios of stablecoins are not only a logic of business expansion but also a bridge of regulatory trust.

In this regard, JD's stablecoin project is clearly positioned to "serve cross-border remittances and corporate payments," with the entry point being the existing business system rather than creating a new on-chain ecosystem. This approach, starting from "extensions of existing systems," aligns perfectly with the Hong Kong Monetary Authority's regulatory tone of "integrating with the real economy."

Corporate Payments: Not Creating C-end Wallets, but B-end Settlement Tools

The JD stablecoin project is a B2B-level settlement tool. According to CEO Liu Peng's statements in the Bloomberg interview, its goal is to provide corporate clients with more efficient exchange methods between different national fiat currencies, reducing the intermediary links and exchange loss costs in traditional cross-border settlements.

This means that the primary function of the JD stablecoin is to "enhance corporate exchange efficiency," with its circulation path being naturally closed and users being clear and controllable. For regulators, such high-certainty scenarios are highly acceptable: they do not involve speculative trading, are not aimed at retail investors, and have controllable risks and clear purposes—this is the ideal "financial technology enhancement tool" rather than a "quasi-financial asset."

Off-chain Integration: Connecting with Existing Supply Chain Finance and Cross-border Settlement Closed Loops

JD has already laid out systems for supply chain finance, cross-border clearing and settlement, and warehousing fulfillment in its cross-border business, and the embedding of stablecoins is essentially a natural extension of the "on-chain certificate + off-chain fulfillment" logic. Compared to most Web3 projects on the market that "issue tokens first and then find scenarios," JD already has demand on the supply side, naturally generating stablecoin use scenarios.

In other words, JD's stablecoin is not issued for the sake of issuing but is used to solve the pain points of currency circulation in existing systems: lack of transparency in multi-currency settlements, high fees, and unstable arrival times. In this system, stablecoins are not a flashy C-end feature but a B-end efficiency tool.

Regulatory Friendly: Clear Scenario Pathways, Verifiable Users, Predictable Returns

Compared to many stablecoin models that construct "pegging relationships" through DeFi protocols and contract mechanisms, what JD provides is a set of "disclosable, reportable, and controllable" commercial application pathways.

Its goal is not to build liquidity pools or token markets but to clearly explain to regulators: this stablecoin is issued to which enterprise, for what scenario, and how it will be settled after use, with every step in the process having KYC, auditing, and traceability mechanisms. To some extent, it is closer to a "settlement certificate operating on the regulatory map" rather than a freely traded market asset.

Conclusion

The JD stablecoin project proves one thing: as stablecoins enter the institutional track today, the project's "structural adaptability" is becoming the core variable determining success or failure.

It is not about who issued the token first, nor who understands smart contracts better, but who can build a complete structure that is accepted by regulators, validated by scenarios, and recognized by the market. This structure cannot be imagined through a white paper; it must be grounded in:

• Localized issuers and reserve isolation accounts;
• Clearing and settlement systems and risk control mechanisms that meet financial-grade requirements;
• Clear scenario value closed loops, especially the real needs of the B-end.

In other words, future stablecoins are not an "extension of crypto projects" but a "new journey for infrastructure-level enterprises."

Portal Labs believes that true benefits will not come in the form of "regulatory leniency," but will gradually be released in the form of "institutional stability + rising compliance capabilities."

For enterprises looking to enter this field, the first question they should ask themselves is: Am I ready to become a financial issuer?

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