Alibaba (BABA) is quietly exploring a blockchain-based deposit token for international payments, according to comments shared by company president Kuo Zhang. The shift would give Alibaba a compliant alternative to traditional stablecoins at a time when Beijing is tightening restrictions on anything resembling privately issued digital money.
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The initiative comes through Alibaba’s cross-border commerce division, which relies heavily on fast, low-friction settlement rails. Zhang told CNBC the company wants to use “stablecoin-like technology” to streamline overseas transactions. Instead of a privately issued token, Alibaba is exploring a deposit token backed by commercial bank liabilities, which is a structure Beijing actually permits.
Deposit tokens function similarly to stablecoins in practice, but regulators treat them as traditional bank obligations. That structure gives them a legal category China is willing to tolerate. JPMorgan’s (JPM) recent rollout of its own deposit token to institutional clients only adds momentum to the model.
Beijing Pressure Forces Tech Giants to Rethink Their Plans
Alibaba’s interest comes as Chinese tech firms continue to encounter resistance from mainland regulators over stablecoins. Earlier this year, both Ant Group (PC:ANTGP) and JD.com (JD) hit pause on plans to participate in Hong Kong’s stablecoin pilot program. The message from Beijing was direct: avoid issuing private stablecoins.
The pressure has intensified. A now-removed Caixin report in September suggested mainland companies may be forced to withdraw from crypto-related activity in Hong Kong entirely. Authorities have also reportedly told firms to stop publishing research and hosting seminars on stablecoins, citing fraud risks.
China’s stance remains evident. Regulators see privately issued stablecoins as a competing monetary network, one that could erode state control over capital flows. That has left Chinese firms searching for alternatives that satisfy overseas business needs without crossing regulatory red lines.
China Allows Only Offshore Workarounds
Despite the clampdown, China isn’t avoiding stablecoins entirely. The activity simply continues outside mainland borders.
Conflux recently launched a stablecoin backed by offshore yuan, catering to Belt and Road partners rather than domestic users. Another offshore yuan stablecoin arrived at Hong Kong’s Belt and Road Summit in September, designed for foreign exchange markets, and not for circulation inside China.
Industry analysts do not expect that to change. Joshua Chu, co-chair of the Hong Kong Web3 Association, said plainly: “China is unlikely to issue stablecoins onshore.”
What Could Come Next
Alibaba’s deposit token, if launched, could offer a compliant on-chain settlement tool for global merchants while avoiding the political baggage tied to traditional stablecoins. More companies may adopt similar models as regulatory lines harden.
For China’s tech giants, the path forward is narrowing. Stablecoins may be off the table, but the demand for faster cross-border payments is only growing. Deposit tokens could become the compromise Beijing allows.
Is Alibaba a Good Stock to Buy Now?
On TipRanks, BABA stock commands a Strong Buy consensus rating based on 19 Buys and two Hold ratings. The average Alibaba stock price target of $198.21 implies 24% upside potential from current levels.
