China has expanded its cryptocurrency ban to include real-world asset tokenization and unauthorized yuan-pegged stablecoins, tightening controls on digital finance while reinforcing restrictions on trading, issuance, and cross-border activity. The policy, issued through a joint notice led by the People’s Bank of China, extends earlier prohibitions on crypto trading, mining, and exchanges.
It now places tokenized financial products and stablecoin issuance under the same banned framework. Authorities said the expanded rules aim to protect financial stability and preserve monetary control. Regulators again stated that virtual currencies do not hold legal tender status in China.
The revised guidelines prevent businesses from distributing yuan-pegged stablecoins to international markets until they receive official permission from Chinese regulatory bodies. This rule applies to domestic companies, offshore subsidiaries, and foreign firms that offer yuan-linked tokens to the market.
The authorities established these measures to eliminate vulnerabilities that had allowed certain yuan-based stablecoins to operate outside mainland China. The officials issued a warning about unapproved stablecoins being distributed in the public domain, which will function as legal tender.
At the same time, authorities reiterated that unauthorized digital currency operations qualify as illegal financial activities. They stressed that currency issuance remains a central bank function.
The most significant change involves real-world asset tokenization. Regulators defined the activity broadly to include tokenized ownership or income rights tied to physical or financial assets. In most cases, authorities now ban these activities outright; only projects approved within the designated financial infrastructure may operate under strict supervision.
Provincial governments must identify and shut down unauthorized projects. Internet platforms must remove promotional content, close applications, and block traffic associated with banned activities. Market regulators will also reject company registrations that reference crypto, stablecoins, or tokenization.
These steps aim to stop speculative activity from re-entering markets under new labels.
The framework also tightens compliance rules. Financial institutions and technology providers cannot offer services linked to stablecoins or RWA tokenization without approval. Intermediaries supporting such activity face enhanced oversight. Cross-border controls now require offshore tokenization tied to Chinese assets to be filed with regulators and to meet anti-money-laundering standards.
Authorities called for coordinated supervision across agencies and provinces. They want faster responses to violations and closer monitoring of digital finance risks. Market response has remained mixed. Some analysts view this move as a continuation of China’s strict stance on decentralized crypto activity, while others point to clearer rules around tokenization as a possible foundation for future regulated use cases.
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For now, regulators maintain that only state-approved channels remain acceptable. The policy’s impact will depend on enforcement actions, especially against attempts by Chinese entities to issue offshore. Will regulators pursue firms testing these limits?
Onshore trading volume and exchange reserves now serve as key indicators. Sustained low levels would signal suppressed liquidity and restricted capital flows. By contrast, sudden reserve spikes could suggest illicit movement. Persistent low activity would indicate effective enforcement of the expanded ban.
China expanded its crypto ban to cover RWA tokenization and yuan stablecoins. The rules block offshore issuance without approval and tighten cross-border controls. Authorities also raised enforcement on platforms and firms. Market participants must now track compliance signals and onshore liquidity data closely.