China’s latest regulatory notice banning crypto activity and restricting yuan-pegged stablecoins signals Beijing is closely monitoring emerging digital asset sectors, particularly real-world asset tokenisation.
The joint notice issued on February 6 reaffirmed China’s blanket prohibition on cryptocurrency activity while explicitly banning unauthorised yuan-backed stablecoins and declaring most forms of RWA tokenisation illegal.
For the first time, regulators directly referenced RWA tokenisation, a move analysts say indicates Beijing is attempting to regulate the sector before it becomes deeply embedded in the financial system.
“Bitcoin mining onshore in China probably sprang up without them even really considering it — and then it got too big,”
Said Jason Atkins, adding:
“I think the inclusion of RWAs is a signal that they’re trying to stay abreast of the latest issues and regulate them ahead of time.”
The notice also separated stablecoins from the broader definition of virtual currencies, recognising them as instruments that can perform some functions of fiat money.
Analysts say that distinction could eventually allow Chinese-affiliated banks operating in Hong Kong to apply for stablecoin licences under the city’s developing regulatory framework.
Despite China’s restrictions, Atkins argued that the global spread of dollar-backed stablecoins may continue to drive demand for U.S. Treasuries because each dollar stablecoin typically requires reserve backing in government debt.
He added that while governments can restrict crypto activity domestically, the borderless nature of digital assets makes it difficult to fully control adoption across global financial networks.
At the time of reporting, Bitcoin price was $70,114.30.