Hi friends,

The past few days of the tariffs escalation reminds me of that famous Rachel - Amy fight in Friends...

The economic fallout is already severe, but the political stakes seem to be even higher. Chinese tech companies are caught right in the crossfire: TikTok's divestment talks have been stalled - China made it clear that any agreement related to TikTok must comply with Chinese law, while Shein's plans to relocate some manufacturing operations outside China are encountering opposition from the government. When will this end and how? 🤨

Despite these headwinds, China's fintech sector is still busy expanding: Airwallex is eyeing banking licenses in the UK and US; Futu launched new AI trading models, and more for you to read in the below.

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Licensing & Regulations

• Airwallex Continues to Expands: Airwallex is pursuing banking licenses in the UK and US, aiming to enhance its global presence and support its US IPO strategy.
• Cross-Border Collaborations: The People’s Bank of China (PBOC) signed an MoU with Georgia’s central bank to enhance fintech cooperation, while the Shanghai Stock Exchange (SSE) and Brazil’s B3 agreed to explore ETF connectivity.
• Hong Kong Crypto Regulations: Hong Kong's financial regulators have introduced new guidelines for cryptocurrency staking services, with the SFC focusing on licensed exchanges and funds, and the HKMA addressing custodial arrangements for authorized institutions.
• More Stimulus Actions: Beijing launched initiatives to boost financing for tech companies, including streamlined credit access and state-backed venture capital partnerships; Chinese state firms are vowing to increase share purchases and listed companies are announcing buybacks.

Product & Partnership Launches

• Alipay Offers Insurance: AXA announced a strategic partnership with Ant Bankand AlipayHK to provide insurance products and services.
• Airwallex’s Israeli Shekel Expansion: Airwallex now supports multi-currency accounts and instant settlements in ILS.
• PayPal Xoom’s Wechat Pay Integration: PayPal’s Xoom now enables cross-border remittances to Wechat Pay wallets.
• WeBank Launches Web3 Infrastructure: WeBank introduced POTOS, a blockchain-based infrastructure to enhance value exchange in Hong Kong's Web3 ecosystem, focusing on security, compliance, and efficiency for institutional use cases like stablecoins and RWA tokenization.
• HKIC Teams with WeLab on AI Innovation: The Hong Kong Investment Corporation (HKIC) and WeLab have formed a strategic partnership to accelerate AI innovation in fintech, foster financial innovation, enhance talent development, and promote inclusive finance across Asia.
• Luckin Coffee x Stripe: Luckin Coffee, China's largest coffee chain, integrated Stripe’s payments infrastructure for its Southeast Asia expansion.
• Futu Launches AI-Powered Trading Models: Online broker Futu introduced AI-powered tools, Futubull AI and Algo Trading, using DeepSeek's AI technology to enhance research, risk management, and trading strategy automation, emphasizing data privacy and security.

Other News

• Ex-Binance CEO Joins Pakistan Crypto Council as Advisor: Changpeng Zhao, the former CEO of Binance, has joined Pakistan's Crypto Council as an advisor, aiming to provide guidance on regulatory frameworks and foster the growth of the cryptocurrency industry in Pakistan.
• Startup Funding Slides 71.4% YoY: Privately-held firms in mainland China, Hong Kong, Macau, and Taiwan saw a 71.4% YoY decline in funding value (207 deals totaling ~$4B), despite a 46.9% MoM increase in deal value and 20.3% MoM rise in volume.