Main Points :
- China is tightening regulatory pressure on stablecoins, pushing major technology companies to halt or scale back related initiatives.
- Alibaba’s cross-border commerce arm is now exploring deposit tokens, a bank-regulated blockchain instrument designed for compliant overseas payments.
- Deposit tokens differ from traditional stablecoins by representing direct claims on commercial bank deposits, giving them regulatory clarity.
- While onshore stablecoins remain politically constrained in China, offshore RMB-linked tokens continue to grow, especially for Belt and Road participants.
- Global tokenization trends—driven by banks such as JPMorgan—are accelerating, making deposit tokens an increasingly important settlement tool for international commerce.
Introduction: A New Battlefront in Digital Payments
As global commerce continues to digitize at a rapid pace, blockchain-based payment instruments are evolving far beyond the original concept of decentralized cryptocurrencies. Over the past year, this evolution has collided directly with a major regulatory pivot in China. Beijing has intensified its crackdown on private stablecoins, leading to the suspension of high-profile projects by major technology companies such as Ant Group and JD.com.
Yet even under such constraints, one of China’s largest enterprises—Alibaba—is exploring a different technological path: deposit tokens, a blockchain-based representation of funds held in commercial banks. Unlike conventional stablecoins, deposit tokens fall squarely within traditional regulatory frameworks, giving them a significantly higher chance of approval within China’s tightly controlled financial ecosystem.
Alibaba’s exploration highlights a broader global trend toward tokenized bank liabilities, a model championed by JPMorgan, Standard Chartered, and several global financial regulators. For investors and builders in the crypto and blockchain space, this represents one of the clearest indicators that digital finance is shifting toward compliance-anchored tokenization rather than purely decentralized models.
This article analyzes the new developments surrounding Alibaba, China’s tightening regulations, global tokenization trends, and the implications for investors and blockchain entrepreneurs seeking viable opportunities.
1. Why Alibaba is Exploring Deposit Tokens
Alibaba’s cross-border e-commerce division confirmed that it is investigating a blockchain-based deposit token to streamline international payments. The company stated that it aims to use technology similar to stablecoins but structured in a way that aligns with regulatory requirements in mainland China.
1.1 What Are Deposit Tokens?
Deposit tokens are blockchain-native representations of commercial bank deposits, giving the holder a direct claim against the issuing bank.
This makes them categorically different from stablecoins backed by reserves:
| Feature | Deposit Token | Typical Stablecoin |
|---|---|---|
| Backing | Actual deposits in a regulated commercial bank | Reserves held by private issuers |
| Legal Status | Bank liability | Corporate liability |
| Regulatory Oversight | Fully within banking regulations | Often outside traditional banking laws |
| Risk Profile | Bank-level | Corporate-level |
This structure is extremely attractive to regulators because it fits well into existing financial oversight systems.
1.2 Why Alibaba Needs It
Alibaba’s e-commerce platforms operate across dozens of countries, processing billions of dollars in cross-border flows. Existing options create several operational frictions:
- High FX conversion costs
- Settlement delays
- Fragmented global banking rails
- Restrictions on capital flows from China
Deposit tokens can solve many of these issues by:
- enabling near-instant settlement
- providing a clear audit trail
- reducing FX inefficiencies
- offering a compliant alternative to unregulated stablecoins
In short, Alibaba is looking for a globally usable but regulator-friendly digital payment instrument.
2. China’s Increasingly Aggressive Crackdown on Stablecoins
Beijing has long maintained skepticism toward private digital currencies, but the latest wave of restrictions represents a more severe shift.
2.1 Major Chinese Tech Firms Forced to Suspend Stablecoin Plans
In early 2025, Ant Group and JD.com paused their Hong Kong stablecoin initiatives after regulators indicated dissatisfaction with the direction of such projects.
The concerns include:
- risk of private entities controlling money-like instruments
- potential for fraud or shadow finance
- alignment with China’s capital control framework
- perceived competition with the digital yuan (e-CNY)
2.2 Mainland Regulators Are Pushing Firms Out of the Stablecoin Space
Authorities have reportedly instructed companies to:
- stop distributing stablecoin-related content
- avoid developing domestic stablecoin ecosystems
- minimize involvement in offshore stablecoin promotions
This is consistent with China’s broader goal of maintaining tight control over monetary instruments, ensuring that no private company becomes a systemic financial player using tokenized assets.
3. Despite Restrictions, Offshore RMB Stablecoins Continue to Grow
Interestingly, China’s restrictions apply primarily to onshore stablecoin activity. Chinese companies are still active in offshore stablecoin markets that target international usage.
3.1 Conflux’s Offshore RMB Stablecoin
In July, blockchain firm Conflux launched a new offshore RMB-backed stablecoin designed for:
- Belt and Road Initiative participants
- overseas partners
- cross-border trade flows
This token is not available domestically in China, but plays a key strategic role externally.
3.2 A Regulated Offshore RMB Stablecoin for FX Markets
Later in September, another RMB-linked stablecoin was introduced as a regulated instrument targeting foreign exchange traders and institutional participants.
This reinforces a key distinction:
- Onshore RMB stablecoin: politically unlikely
- Offshore RMB stablecoin: strategically promoted for geopolitical trade influence
Hong Kong Web3 Association co-chair Joshua Chu summarized it well:
“China is unlikely to issue or endorse an onshore stablecoin.”
4. Global Context: Tokenization Is Becoming a New Financial Standard
Alibaba’s pivot toward deposit tokens is not isolated. Around the world, major banks and regulators are accelerating tokenization.
4.1 JPMorgan and the Rise of Deposit Token Infrastructure
JPMorgan has built multiple tokenized systems including:
- JPM Coin
- Tokenized Collateral Network (TCN)
- deposit-token models supporting programmable payments
These instruments serve corporate clients and settle billions of dollars daily.
4.2 Regulators Are Warming to Tokenized Bank Liabilities
Market regulators in the EU, UK, Singapore, and Japan increasingly favor models where:
- commercial banks issue digital assets
- oversight remains intact
- compliance is embedded into the architecture
This regulatory shift strengthens the position of deposit tokens while placing pressure on privately issued stablecoins.
5. Strategic Implications for Crypto Investors and Entrepreneurs
Alibaba’s move provides important signals for anyone building in the crypto industry.
5.1 Deposit Tokens Will Become Dominant in Regulated Economies
Jurisdictions with strict financial control (China, Singapore, EU, UAE) prefer bank-issued tokens because they:
- eliminate redemption risk
- reduce regulatory uncertainty
- maintain monetary authority oversight
Stablecoins will still thrive in open markets, but deposit tokens will dominate where compliance is paramount.
5.2 Cross-Border Commerce Will Shift Toward Bank-Backed Tokenized Money
Global e-commerce giants need:
- faster settlements
- lower costs
- programmable compliance
- blockchain auditability
Deposit tokens meet all four requirements.
5.3 Ripple Effect on Crypto Markets
This trend will benefit:
- blockchain infrastructure providers
- tokenization platforms
- cross-chain interoperability networks
- compliant fintech ecosystems
Meanwhile, purely private stablecoins may face increasing regulatory barriers across major markets.
6. Insert Chart: Conceptual Snapshot of Market Dynamics
7. Conclusion: The Future Belongs to Regulated Tokenization
Alibaba’s exploration of deposit tokens demonstrates a pivotal moment in global digital finance. The world is trending toward:
- regulated tokenization
- bank-issued digital liabilities
- programmable payment systems built on compliant architecture
China’s tightening stance on stablecoins is accelerating this shift. Offshore markets will still experiment with various stablecoin models, but the long-term winners—especially for cross-border commerce—are likely to be deposit tokens and bank-backed blockchain instruments.
For investors, entrepreneurs, and blockchain developers, the message is clear:
Follow the regulatory alignment. Tokenization is not just the future—it is becoming the standard.
