China strengthens its crypto ban and enforces rules on real-world asset tokenization and offshore yuan stablecoins.
China’s central bank and key state regulators have reiterated that crypto-related activity remains illegal in the mainland. The new guidance extends enforcement to cover the tokenization of real-world assets (RWA) and offshore stablecoin issuance that are linked to the yuan.
Regulators pointed to increasingly dangerous risks of speculative trading interfering with the economic and financial order. They placed an emphasis on safeguarding the safety of property and the national stability.
Authorities Clarify Crypto and RWA Tokenization Regulations
The People’s Bank of China and agencies like the National Development and Reform Commission, Ministry of Public Security and securities regulator emphasised that cryptocurrencies are not legal tender.
Bitcoin, Ethereum and Tether are examples of digital assets released by non-monetary authorities. Exchanges, issue of tokens and crypto-financial services are strictly prohibited. Foreign entities are prohibited from providing crypto services to local clients.
Stablecoins pegged to the yuan may not be issued in a foreign country without approval. RWA tokenization, i.e. converting ownership or income rights into tokens, is authorized under the financial infrastructure. Any unauthorised services of RWA, or any intermediary support relating to RWA, are illegal.
Inter-Departmental Coordination Strengthens Enforcement
Chinese authorities have set up a multi-agency coordination system for preventing and monitoring risks. Provincial governments carry out local responsibility. They have to work with the courts, the procuratorates and the cyberspace authorities.
On the other hand, financial institutions are not able to provide accounts, custody or clearing services when it comes to non authorized crypto or RWA tokenization. The use of Internet platforms is banned from marketing, listings, or paid promotion of such activities.
In addition, regulators will be able to monitor risks in real-time. They will use cross-departmental data sharing, offline inspections and fund tracing to detect illegal activity. Virtual currency mining is also strictly regulated, with unapproved projects being shut down. Enterprises cannot use crypto or RWA tokenization terms in their registered business names.
Offshore Supervision and Risk Prevention
Domestic entities or their controlled overseas subsidiaries cannot issue virtual currencies overseas without regulatory approval to do so. RWA tokenization by the domestic equity must abide by the “same business, same risk, same rules” principle. Required approvals or filings are required for overseas operations.
Moreover, industry self-regulation is also promoted. Trade associations must encourage compliance with laws, as well as disclose irregularities. Public awareness campaigns will educate citizens on the risks of virtual currency and RWA tokenization. Violators of the new rules are subject to administrative, civil or criminal liability depending on how serious the violation.
On the other hand, China’s move follows a change in its previous stance about cryptocurrency. By incorporating tokenization and offshore stablecoin issuance, the authorities hope to keep the financial order and social stability.
Ultimately unauthorized assets could cost investors everything, with regulators being keen on legal accountability for both service providers and users. This step indicates that Beijing will tightly regulate all the emerging activities about digital assets, domestic and international.