China Formalizes Ban on Yuan Stablecoins, RWA Tokenization

Chinese regulatory authorities have recently solidified and clarified their comprehensive ban on cryptocurrency-related activities, explicitly targeting Yuan-pegged stablecoins and the tokenization of Real-World Assets (RWA).

While China initiated a sweeping crackdown on virtual currency trading and mining in 2021, the new formalizations aim to close specific loopholes and reinforce the nation’s stringent anti-crypto posture, particularly concerning financial stability and monetary sovereignty.

Yuan Stablecoins (CNY Stablecoins), which attempt to peg their value to the Chinese fiat currency, have been formally designated as illegal financial instruments. Regulators view these assets as direct competitors to the nation’s official currency and a potential pathway for circumventing capital controls and monetary policy. The issuance, promotion, and trading of any stablecoin linked to the Yuan are now strictly classified as unauthorized public financing activities, subject to severe penalties.

Furthermore, the increasingly popular global trend of RWA Tokenization has also been explicitly prohibited within mainland China. RWA tokenization involves converting traditional assets (such as real estate, commodities, or physical debt) into digital tokens on a blockchain. Chinese financial oversight bodies classify this activity as operating an unlicensed securities exchange or illegal fundraising, regardless of the underlying assets’ legitimacy. This regulatory hardening effectively shutters any legal development of decentralized finance (DeFi) built around tokenized physical assets within the jurisdiction, reinforcing the policy goal of isolating China’s financial system from unregulated digital currency markets.

Source: China Formalizes Ban on Yuan Stablecoins, RWA Tokenization