China Bans RWA for First Time: 7 Agencies’ Biggest Crypto Crackdown Since 2021
Seven main Chinese monetary trade associations collectively issued a threat warning, marking essentially the most complete crypto crackdown for the reason that 2021 ban that drove all crypto exchanges in a foreign country.
The associations cowl banking, securities, funds, futures, fee clearing, listed firms, and web finance. They acknowledged that every one crypto-related enterprise actions, together with stablecoins, airdrops, mining, and, notably, real-world asset (RWA) tokenization, are unlawful in China.
RWA Tokenization Enters Regulatory Crosshairs
The statement, which was issued on Dec 5, explicitly famous that Chinese monetary regulators have “not permitted any real-world asset tokenization actions,” marking the primary official prohibition of RWA within the nation.
A researcher explained that the final time this coalition mobilized was September 24, 2021. It was when 10 authorities departments collectively issued the “Notice on Further Preventing and Disposing of Risks from Virtual Currency Trading Speculation.” That motion compelled all cryptocurrency exchanges to exit China and shut down all mining operations. China’s share of worldwide Bitcoin hashrate plummeted from 75%.
This transfer comes as international RWA tokenization surpasses $30 billion in market dimension. Major gamers like BlackRock’s $2 billion BUIDL fund—tokenized by Securitize and accepted as collateral on Binance, Crypto.com, and Deribit—are driving mainstream adoption.
Chinese regulators seem involved that RWA tokenization might turn out to be a complicated instrument for capital flight. The mechanism would enable people to transform home property into tokens, switch them to offshore wallets, and alternate them for overseas foreign money—all bypassing conventional banking and overseas alternate controls.
Enforcement Tightens With Multi-Agency Coordination
The assertion reemphasized that digital currencies, together with stablecoins and tokens reminiscent of Pi coin, lack authorized standing and can’t be circulated in China. Individuals and organizations could not subject, alternate, or elevate funds through RWAs or digital currencies inside mainland China. This restriction additionally applies if offshore firms make use of workers based mostly in China.
The coordinated motion follows the PBoC’s November 28 meeting with high authorities officers. The authorities declared stablecoins a type of digital foreign money topic to prosecution.
A December report famous a 37% year-on-year improve in cash laundering involving digital property, reinforcing the push for strict enforcement.
The seven associations’ joint assertion creates what analysts describe as a “four-layer blockade.” This consists of chopping off mining infrastructure, blocking stablecoin fee channels, sealing RWA pathways, and eliminating fraudulent schemes like Pi Network.
The warning additionally attracts a transparent boundary with Hong Kong’s crypto-friendly approach, stating that “mainland workers of offshore digital foreign money service suppliers” will face authorized penalties. China has as an alternative promoted the digital yuan (e-CNY) as a state-approved various.
Hong Kong launched its stablecoin licensing regime on August 1, 2024, attracting 80 candidates, with first approvals anticipated in early 2026. Licensed platforms like HashKey and OSL proceed to function digital asset exchanges. The metropolis additionally permits RWA tokenization pilots, although strictly restricted to offshore property and non-mainland customers.
Youth Discontent Simmers Beneath Surface
The ban sparked a heated on-line debate, notably amongst younger traders who really feel excluded from international crypto alternatives. Analysis by BigNews highlighted youth frustration, pushed by hopes for fast wealth amid Bitcoin’s rally and crypto-friendly U.S. rules.
Discussions on on-line communities reveal disappointment over the coverage hole between China and Western nations. Critics argue that blanket bans stifle innovation alongside official investor safety.
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