China tightens stance on RWA tokenization and offshore yuan stablecoins, reiterates crypto ban

China’s central bank and a group of key state regulators have reiterated that crypto-related activity remains illegal in the mainland while explicitly expanding enforcement to cover real-world asset tokenization and offshore stablecoin issuance linked to the yuan.

In a joint notice released on Friday, the People’s Bank of China and agencies including the National Development and Reform Commission, the Ministry of Public Security, the securities regulator, and the foreign-exchange watchdog said speculative activity tied to virtual currencies and RWA tokenization has reportedly disrupted financial order.

The notice restated Beijing’s long-running position that all cryptocurrencies, including bitcoin and stablecoins like USDT, do not have the same legal status as fiat currency and should not circulate as money. A wide range of crypto-linked business activities within China appear to constitute illegal financial activities, including converting crypto to fiat, exchanging tokens, acting as a central counterparty, and providing information and pricing services for transactions.

Beijing hardens crypto restrictions

Authorities in the country have now taken a more explicit stance on yuan-linked stablecoins. The notice states that without approval from the relevant regulators, no entity or individual, inside or outside China, may issue offshore stablecoins pegged to the renminbi.

The directive also sharpened language around RWA tokenization, defining it as the use of cryptography and distributed ledger technology to convert ownership or income rights into token-like certificates that can be issued and traded.

According to the notice, such activity in China should be prohibited, alongside related intermediary and IT services, unless it is conducted on specific financial infrastructure with the approval of competent authorities. It has also barred foreign entities and individuals from illegally providing RWA tokenization services to domestic counterparties.

Beyond domestic restrictions, the notice tightened the perimeter on offshore structures. Regulators said domestic entities — or their controlled offshore entities — may not issue virtual currencies abroad without required consent, and it has set out “same business, same risk, same rules” supervision for RWA tokenization conducted overseas that is based on domestic rights or domestic assets, requiring relevant approvals or filings.

Although stronger language regarding tokenization and offshore operations is new, this is not the first time Beijing has clamped down on the nascent field. Authorities previously ordered brokerages to halt tokenization efforts in Hong Kong. The country has also regularly flagged stablecoin risks while promoting state-backed yuan-focused digital currencies.