China has moved to harden its stance on crypto-related innovation, issuing a pair of regulatory measures that together close off familiar paths for token issuers and redraw the frontier for digital-asset experimentation.
A joint notice from the People’s Bank of China and seven other state bodies reaffirmed that virtual-currency businesses constitute illegal financial activity and for the first time categorically forbade any domestic unit or individual from issuing a stablecoin pegged to the renminbi abroad. The China Securities Regulatory Commission followed with an operational guidance that, for the first time, defines tokenisation of real-world assets (RWA) and enshrines a regulatory principle described as “strictly banned domestically, tightly regulated overseas.”
The CSRC’s guidance treats RWA tokenisation as the conversion of ownership or income claims into tokens or token-like certificates using cryptography and distributed ledgers, followed by issuance and trading. Regulators will prohibit onshore RWA issuance and related intermediary and technology services unless those activities are expressly authorised by the competent authorities and routed through approved financial infrastructures.
Legal practitioners and compliance specialists said the rules were aimed at three core risks that emerged during the recent RWA boom: disguised or unregulated public fundraising that resembles securities issuance, uncertainty over legal relationships between on-chain tokens and off-chain assets, and cross-border regulatory-arbitrage that channels domestic assets through offshore issuance and then returns funds to China.
The separate restriction on RMB-pegged stablecoins is explicitly framed as a monetary-management and capital-control concern. Regulators warn that stablecoins tied to a sovereign currency can replicate some functions of that currency in circulation; the ban effectively cuts off a common compliance strategy in which Chinese teams seek to issue yuan-stable tokens from offshore jurisdictions and serve domestic customers.
Practical effects will be felt immediately along several vectors. Firms that had planned or executed structures involving onshore assets and offshore token issuance will face heightened legal risk; internet platforms and social-media channels are explicitly barred from providing marketing, hosting or paid referral services for virtual-asset projects and must report suspicious activity and assist investigations. At the same time, the guidance leaves a narrow compliance window for activities that run on sanctioned financial infrastructure with approval from regulators, suggesting supervised pilots rather than a blanket prohibition for all innovation.
Observers note this is as much about closing loopholes as it is about signalling a steady regulatory posture. Hong Kong’s 2025 Stablecoin Regime — which sparked renewed interest in RMB-linked stablecoins — and the global proliferation of RWA projects that exploded in 2025 prompted Beijing to convert exploratory guidance into enforceable rules. The shift marks a transition from exploratory engagement with crypto technologies toward a long-term, enforcement-oriented regulatory cycle.
For the international crypto industry, the measures introduce additional legal and operational complexity. RMB-pegged stablecoins are effectively off the table for Chinese-backed issuers; incumbent stablecoin issuers that rely on dollar-denominated reserves are less directly affected, but any service targeting Chinese onshore users via offshore issuance will now be scrutinised. Financial firms, blockchain developers and trading platforms with exposure to China will need to reassess compliance frameworks, corporate structures and product roadmaps.
Beyond immediate market adjustments, the policy underlines Beijing’s broader priorities: preserving monetary sovereignty, preventing illicit capital flows and protecting retail investors from opaque token offerings. The rules also make clear that digital-asset activity cannot rely on social media amplification or internet platforms for distribution and must instead be channelled into regulated financial infrastructures if it is to survive scrutiny.