China Formalizes Ban on Yuan Stablecoins, RWA Tokenization
China’s central bank and nine other regulators have jointly banned unapproved issuance of yuan-linked stablecoins and classified most real-world asset (RWA) tokenization as illegal. The directive prohibits trading, issuance, intermediary services, and circulation of virtual currencies, stablecoins, and tokenized assets, stating these activities pose systemic financial risks and threaten economic stability and property safety. Cryptocurrencies and related financial services are explicitly deemed illegal unless approved by authorities, and any overseas issuance of renminbi-linked stablecoins is barred. RWA tokenization—using distributed ledger technology to transform assets into tradable tokens—is now illegal unless conducted within approved financial infrastructure. The measures are intended to protect national security and maintain the state’s control over monetary policy, particularly shielding the digital yuan from private or foreign competition. This crackdown continues a long-standing restriction on crypto activities in China, compelling businesses to either abandon decentralized initiatives or move them to state-sanctioned frameworks. Prior regulatory actions have also targeted RWA tokenization and private stablecoin projects linked to Hong Kong.
