China Reaffirms Crypto Ban, Cracks Down on Yuan Stablecoins and Tokenized Assets

Concerns about China’s stance on digital assets have resurfaced as Bitcoin drifts deeper into bear market conditions. Chinese authorities have announced a tighter interpretation of their existing cryptocurrency ban, moving to explicitly outlaw activities tied to real-world asset (RWA) tokenization and unapproved stablecoins tied to the yuan.

In a joint action led by the People’s Bank of China alongside multiple enforcement agencies, Beijing made clear that its stance on crypto remains unchanged. Although trading and mining were effectively outlawed in 2021, the latest guidance is designed to close gaps that allowed some investors and companies to maintain indirect exposure through overseas platforms and products.

While many countries view RWA as a way to modernize settlement systems and improve market efficiency, Chinese officials see the trend as a potential source of financial risk. Chinese regulators argue that such instruments can encourage speculation and complicate oversight, especially when issued beyond the country’s borders.

The directive also takes aim at digital currencies pegged to the yuan. China has long guarded control over its currency, and officials have repeatedly warned against private alternatives that could undermine monetary authority. Unauthorized stablecoins linked to the yuan are now explicitly categorized as illegal, regardless of where they are issued.

The notice applies what regulators described as a principle of equal treatment. It states that no individual or organization is allowed to create offshore stablecoins tied to the yuan without approval. The measure effectively shuts the door on foreign crypto firms seeking to offer yuan-based products to users with ties to China. Analysts view the move as part of a broader effort to limit capital outflows and maintain strict oversight of financial flows.

China’s position stands in sharp contrast to other nations. Hong Kong is moving ahead with plans to become a regulated center for crypto, including a licensing framework for stablecoins expected to launch soon.

In the US, major financial institutions are exploring blockchain-based products, even as lawmakers struggle to agree on comprehensive rules. Other regions, including parts of Africa, are testing local currency stablecoins rather than banning them outright.

For investors, the message is clear. Digital assets may operate on global networks, but regulation remains firmly rooted in national policy. Projects connected to Chinese assets or demand may encounter additional barriers, while those based in clearer regulatory environments could find themselves at an advantage.

Major actors like Bullish (NYSE: BLSH) in the international crypto space will be taking note of any regulatory developments that could impact their long-term strategic plans in the markets in which they wish to establish a presence.

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