Seven Chinese Financial Associations Declare RWA Tokenization Illegal

Seven main Chinese monetary {industry} associations collectively declared that real-world asset (RWA) tokenization is an unlawful monetary exercise, simply after reinforcing their ban on crypto trading.

According to a local report, the China Internet Finance Association, China Banking Association, China Securities Association, China Asset Management Association, China Futures Association, China Association of Listed Companies, and China Payment and Clearing Association issued the discover warning each home and worldwide practitioners that RWA actions lack any authorized foundation for operation below Chinese legislation.

Chinese Financial Associations RWA - Memo in Chinese — Source: Weixin

The assertion listed RWA alongside stablecoins, “nugatory cryptocurrencies,” and crypto mining as major manifestations of unlawful digital forex actions, successfully categorizing tokenization initiatives as high-risk, fraudulent strategies reasonably than as rising monetary applied sciences awaiting regulatory clarification.

Attorney Liu Honglin described the coordinated announcement as “a blatant cross-industry, cross-regulatory ‘unified messaging’ operation,” noting that such affiliation collaborations sometimes happen solely at vital junctures in stopping systemic monetary dangers.

RWA: Financing Activity Subject to Securities Law

The joint discover explicitly outlined real-world asset tokenization as “financing and buying and selling actions by the issuance of tokens or different rights and debt devices with token traits,” stating such operations carry “a number of dangers, together with the danger of fictitious property, the danger of enterprise failure, and the danger of hypothesis.“

Regulators emphasised that “my nation’s monetary regulatory authorities haven’t accredited any real-world asset tokenization actions,” eliminating any chance that initiatives might declare to be in regulatory exploration phases or awaiting registration approval.

This stance differs from that of counterparts akin to Singapore, which leads the global ranking in 2025 for RWA adoption.

Officials significantly outlined three vital violations below current Chinese legislation related to RWA operations.

Chinese Financial Associations RWA - Three Critical Point Screenshots — Source: Weixin

Projects issuing tokens to most of the people whereas elevating funds face unlawful fundraising fees, whereas facilitating transactions or distributing tokens with out permission constitutes unauthorized public securities choices.

Token buying and selling involving leverage or betting mechanisms might represent unlawful futures enterprise operations, with these characterizations grounded instantly in provisions of China’s Criminal Law and Securities Law reasonably than basic coverage warnings.

The doc said that RWA token constructions can’t assure authorized possession or the liquidation of underlying property, no matter whether or not mission groups consider their property are real and know-how clear, with regulators judging that threat spillover stays uncontrollable even in supposedly compliant initiatives.

The warning particularly addressed projects attempting to circumvent regulations by “real-world asset anchoring,” “abroad compliance path,” and “technology service output” narratives.

Joint Liability Under New Enforcement Framework

The discover particularly focused not solely mission operators however your complete Web3 service ecosystem supporting RWA actions, stating that “home workers of related abroad digital forex and real-world asset token service suppliers, in addition to home establishments and people who knowingly or ought to have identified that they’re engaged in digital currency-related companies and nonetheless present providers to them, shall be held accountable in keeping with legislation.“

This “figuring out or ought to have identified” customary establishes a authorized presumption of legal responsibility based mostly on affordable goal judgment reasonably than requiring proof of subjective intent, instantly negating the frequent Web3 operational mannequin of offshore firm registration with mainland Chinese workers.

Attorney Honglin famous this implies groups can’t escape accountability by claiming pure know-how service provision or infrastructure assist roles.

Project planners, know-how outsourcing suppliers, advertising and marketing brokers, influencer promoters, and fee interface suppliers all face potential authorized penalties if they supply providers to RWA initiatives focusing on Chinese customers.

The directive said that even hiring a single operations particular person in China might expose ostensibly offshore initiatives to authorized dangers.

This enforcement method successfully terminates your complete home Web3 service chain constructed round RWA inside China, as supporting providers lose viable enterprise fashions alongside the prohibition on major operations.

The crackdown follows frequent fraudulent actions working below RWA branding, with the doc noting that “criminals are making the most of this to advertise associated buying and selling and hypothesis actions, utilizing stablecoins, nugatory cash (akin to π coin), Real-World Asset (RWA) tokens, and ‘mining’ as a guise to hold out unlawful fundraising, pyramid schemes, and different unlawful actions.“

The timing coincides with China’s push to internationalize its digital yuan by a brand new Shanghai operations middle centered on cross-border funds and blockchain providers, whereas concurrently blocking main tech companies Ant Group and JD.com from issuing stablecoins in Hong Kong to protect the state’s monopoly on forex issuance.

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