The People's Bank of China, together with the China Securities Regulatory Commission and other agencies, jointly issued a notice updating China’s framework for preventing and disposing of risks linked to virtual currencies and the tokenization of virtual currencies and real-world assets (RWA). The accompanying regulator Q&A reiterates that virtual currency-related business activities in China are illegal financial activities and sets out tighter expectations for cross-border issuance and service provision. The notice maintains the position that virtual currencies do not have the same legal status as legal tender and prohibits overseas entities and individuals from providing virtual currency-related services to domestic entities in any form. It also cites customer identification and anti-money laundering constraints and the risk of use in money laundering, fraud and illegal cross-border fund transfers, and requires domestic entities and their controlled overseas entities to obtain relevant approvals before issuing virtual currencies overseas. For RMB-pegged stablecoins, it states that, without approval under applicable laws and regulations, no unit or individual at home or abroad may issue RMB-pegged stablecoins overseas. For RWA tokenization, the notice defines it as using cryptography and distributed ledger or similar technologies to convert asset ownership and income rights into tokens or token-like rights and interests for issuance and trading. It prohibits RWA tokenization activities in China where they involve illegal financial activities such as illegal sale of token instruments, unauthorized public issuance of securities, illegal securities and futures business, or illegal fundraising, and extends the prohibition to providing related intermediary and information technology services, while carving out certain activities that rely on specific financial infrastructure with competent authority consent. Domestic entities conducting certain RWA tokenization activities overseas based on domestic rights and interests must obtain consent and complete filings as required, with oversight allocated among the National Development and Reform Commission, the China Securities Regulatory Commission and the State Administration of Foreign Exchange; overseas subsidiaries and branches of domestic financial institutions providing such services must apply domestic compliance, appropriateness and anti-money laundering requirements. The implementation approach emphasises central-local coordination, with provincial governments responsible for local risk disposal, and cross-department measures spanning risk monitoring, governance of capital and information flows, registration and advertising management, rectification of virtual currency mining and enforcement against illegal and criminal activity.
Central Bank of the Republic of China 2026-02-06
People's Bank of China and China Securities Regulatory Commission issue updated notice to curb virtual currency activity and real-world asset tokenization risks
The People's Bank of China, the China Securities Regulatory Commission, and other agencies updated the framework for managing risks associated with virtual currencies and tokenization of real-world assets, reiterating that virtual currency-related activities are illegal in China. The notice prohibits overseas entities from providing virtual currency services to domestic entities, mandates approvals for RMB-pegged stablecoins and RWA tokenization, and emphasizes central-local coordination for risk management and compliance.