The People’s Republic of China (PRC) has recently reinforced its comprehensive ban on cryptocurrency activities, extending its regulatory scrutiny to emerging sectors such as Real-World Asset (RWA) tokenization and stablecoins pegged to the offshore yuan (CNH). This move underscores Beijing’s unwavering commitment to financial stability and control over capital flows, viewing decentralized finance mechanisms as inherent risks to monetary sovereignty.
Authorities are particularly concerned that the tokenization of RWAs—such as real estate, commodities, or securities—could be utilized as a means to circumvent established capital control mechanisms and execute unregistered securities offerings. Regulatory bodies have signaled that using blockchain technology to fractionalize and trade tangible assets falls under the scope of illegal financial activity if conducted without proper licensing from the central bank or securities commission.
The heightened focus on CNH-pegged stablecoins reflects the central bank’s anxiety regarding unauthorized attempts to digitize the national currency. While China promotes the official Digital Currency Electronic Payment (DCEP), any private issuance of stablecoins tied to the yuan, even the offshore variant, is viewed as a direct challenge to the People’s Bank of China’s (PBOC) monopoly on currency issuance and a potential vehicle for illicit capital flight, contradicting efforts to maintain tight control over the yuan’s value and circulation.
This renewed stance confirms that the 2021 ban, which outlawed all crypto mining, trading, and exchange operations within mainland China, remains the foundational policy. The government is actively adapting enforcement strategies to encompass new blockchain-based financial instruments, ensuring no regulatory loopholes are exploited by emerging tokenization platforms.
Source: China tightens stance on RWA tokenization and offshore yuan stablecoins, reiterates crypto ban
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