China Strengthens Measures Against Virtual Currencies, Stablecoins, and RWA Tokenization

TLDR China’s central bank reaffirms a blanket ban on crypto activities, including trading, issuance, and mining. Virtual currencies like Bitcoin and Ethereum are prohibited from being used as currency under Chinese regulations. The government has imposed strict bans on stablecoin issuance linked to the Chinese Yuan without approval. RWA tokenization activities are restricted unless explicitly approved by relevant financial authorities. China strengthens enforcement through interdepartmental cooperation and enhanced monitoring to detect illegal crypto activities. China’s central bank and regulators have reaffirmed a blanket ban on crypto activities, including trading, issuance, mining, and unapproved RMB-linked stablecoins. The new directives specifically target the tokenization of real-world assets (RWA), prohibiting activities unless they are explicitly approved. Enforcement against illegal activities related to virtual currencies and offshore operations has been intensified. Virtual Currency and Tokenization of Real-World Assets Banned China’s recent notice reiterates that virtual currencies like Bitcoin, Ethereum, and Tether do not have legal tender status. The central bank emphasizes that these currencies cannot be used as currency in the market. Virtual currency-related activities, such as exchange, token issuance, and financing, are now classified as illegal financial activities. The Chinese government has taken strong measures against foreign entities offering virtual currency services to domestic companies. It has also banned the issuance of stablecoins linked to the Chinese Yuan unless approved by relevant authorities. The regulatory bodies have made it clear that the tokenization of real-world assets falls under similar restrictions, except for activities conducted under designated financial infrastructure with government approval. Authorities have also emphasized the risks posed by tokenization activities, stating they disrupt economic stability. Any r...