China Slams the Door on Stablecoins and RWA Tokenization in Sweeping Crypto Clampdown

China has rolled out its toughest crypto restrictions since 2021, dramatically expanding an existing ban to cover stablecoins and real-world asset (RWA) tokenization.

In a joint notice issued on Feb. 6, eight top regulatory bodies—including the People’s Bank of China (PBOC) and the China Securities Regulatory Commission—outlined a broad crackdown aimed at what they described as rising risks to financial stability and monetary sovereignty. The move marks a sharp escalation from earlier measures that focused primarily on Bitcoin mining and trading.

The new rules prohibit both domestic and foreign entities from offering stablecoin or tokenization services to Chinese residents. Regulators also moved to close the long-used “offshore loophole,” barring Chinese companies and their overseas subsidiaries from issuing digital currencies without explicit government authorization.

Authorities warned that fiat-pegged stablecoins increasingly resemble sovereign money, arguing they weaken the state’s ability to manage the money supply while sidestepping strict anti-money-laundering and identity verification standards. As part of this stance, the notice explicitly bans the issuance of renminbi-pegged stablecoins outside mainland China—a step widely seen as reinforcing the role of the e-CNY, the country’s central bank digital currency.

The directive also takes aim at the fast-growing RWA tokenization market, estimated at $24 billion globally. Regulators reclassified unauthorized tokenization—such as fractional ownership of real estate or securities—as illegal fundraising, unauthorized securities offerings, and unlicensed futures activity.

While a narrow channel remains open for blockchain activity conducted on state-approved financial infrastructure, companies seeking to tokenize assets abroad must now meet stricter compliance requirements and secure domestic approval.

To ensure enforcement, Beijing plans to coordinate local and national oversight, cutting off regulatory arbitrage strategies that previously allowed firms to test blockchain products in neighboring jurisdictions.

With this expansion, China has made its position clear: future digital finance must operate exclusively within tightly controlled, permissioned systems aligned with state policy.