China Bans Stablecoin and RWA Issuance by Foreign and Domestic Companies

Beijing has issued a definitive and sweeping directive reinforcing the prohibition against the issuance, marketing, and distribution of stablecoins and tokenized Real-World Assets (RWAs) within and towards the People’s Republic of China (PRC). This policy explicitly targets both domestic companies and foreign entities attempting to engage Chinese citizens in these digital asset activities.

The regulatory crackdown, primarily driven by the People’s Bank of China (PBoC) and the Ministry of Public Security, views private stablecoins as an inherent threat to China’s monetary sovereignty and a vehicle for illicit cross-border capital flight. All forms of privately issued digital currencies pegged to fiat assets (like USD or EUR) are now categorically defined as unauthorized financial instruments.

Similarly, the tokenization of Real-World Assets—such as real estate, commodities, or specialized funds—is flagged as a grave concern. Authorities contend that RWA issuance circumvents established securities laws and creates an opaque shadow banking system, raising significant risks regarding asset verification, custody, and potential misuse in unregulated fundraising schemes. The directive mandates a ‘zero-tolerance’ policy for any platform facilitating the trading or fractional ownership of these tokenized assets.

The enforcement scope is universal: issuance originating from Chinese soil, promotional efforts by foreign firms targeting mainland users, and participation by domestic financial institutions are all subject to severe penalties. Consequences for non-compliance include asset forfeiture, business license revocation, and the initiation of criminal proceedings against key personnel.

This aggressive measure further solidifies China’s overarching strategy to maintain tight control over financial innovation, reserving the digital currency space exclusively for the state-backed Digital Yuan (e-CNY) and ensuring all financial flows adhere strictly to central regulatory oversight.

Source: China bans stablecoin and RWA issuance by foreign and domestic companies