Alibaba’s cross-border arm is exploring an Alibaba deposit token to speed up international payments as Beijing tightens control over stablecoins.
What is the Alibaba Deposit Token Plan?
Alibaba.com president Kuo Zhang told CNBC in a Friday report that the company wants to use stablecoin-like technology to facilitate foreign transactions. According to a CNBC report, the cross-border e-commerce unit plans to collaborate with banks in the field of tokenized payments. However, the design would differ from privately issued crypto stablecoins.
A deposit token is a blockchain-based instrument that represents a direct claim on deposits from commercial banks and is treated as a regulated liability of the issuing bank. Furthermore, this deposit token model reflects the usability of stablecoins, but its issuer is a bank and not a crypto company. That said, it could allow for faster resolution for exporters.
JPMorgan Chase – the world’s largest bank by market capitalization – reportedly rolled out its deposit token to institutional clients earlier this week. The development underlines the increasing interest in bank-issued tokens. However, Alibaba’s approach must be in line with China’s policy position.
Why is China saying no to stablecoins?
Chinese tech giants, including Ant group And JD.comhas suspended plans to issue stablecoins in Hong Kong after regulators in Beijing expressed their displeasure. The move reflects a broader crackdown on Chinese stablecoins, prioritizing control and risk prevention. Moreover, it indicates that Chinese tech stablecoins remain a sensitive topic on the mainland.
Both in July Ant group And J.D expressed interest in participating in Hong Kong’s pilot stablecoin program or launching tokenized financial products such as digital bonds. In the same way, HSBC and the largest bank in the world by total assets – the Industrial and Commercial Bank of China – would share these Hong Kong stablecoin ambitions in early September. However, sentiment changed soon after.
Later in September, a now-deleted report from the Chinese financial medium was published Caixin claimed that Chinese companies operating in Hong Kong may be forced to withdraw from cryptocurrency-related activities. According to the report, policymakers would also restrict investments by mainland companies in crypto and exchanges. See detailed coverage of the Caixin report via this Cointelegraph analysis. That said, authorities continued to emphasize financial stability.
In early August, Chinese authorities reportedly ordered local companies to stop publishing research and holding seminars related to stablecoins, citing concerns that stablecoins could be exploited for fraud. Furthermore, the guidelines reinforced a policy that discourages the emergence of a local stablecoin industry.
Offshore yuan stablecoins: what is allowed?
At the end of July, Conflux announced a third version of its public network and introduced a new stablecoin backed by the offshore Chinese yuan. Still, the offshore yuan stablecoin targets offshore Chinese entities and Belt and Road participants, and not the mainland. See the Conflux 3.0 announcement for background information on the upgrade. However, use remains focused on cross-border institutions.
A regulated stablecoin was launched at the end of September, pegged to the international version of the Chinese yuan. Still, it was aimed at the currency markets and debuted at the Belt and Road Summit in Hong Kong, indicating a similar target audience. Moreover, these moves demonstrate China’s preference for controlled, offshore experiments.
What comes next for Alibaba and Hong Kong?
A recent analysis shows that we should not expect Chinese stablecoins to be allowed to circulate on the mainland. Joshua Chuco-chair of the Hong Kong Web3 Association, said: “China is unlikely to issue stablecoins onshore.” However, bank-issued instruments can still support compatible Alibaba blockchain payments for exporters and small and medium businesses operating across borders.
That said, success will depend on banking partners and regulators in Hong Kong and other jurisdictions. Additionally, coordination with JPMorgan Chase and similar institutions could help align any JPMorgan deposit token integrations with local regulations. Implementation details will determine timing and scope.
If approved, the Alibaba deposit token would streamline cross-border settlements while matching China’s stance: no private stablecoins at home, limited experimentation abroad.