Chinese authorities announced a ban on offshore stablecoin activity pegged to the yuan and the tokenization of RWA. The announcement declared related business activities illegal and tightened approval requirements for any overseas yuan-linked issuances.
In general terms, the advisory redefines the boundaries between what is permitted and prohibited in the use of yuan-linked crypto assets. In doing so, it introduces a new layer of regulatory friction that affects both issuers and technology intermediaries, and reduces the operational flexibility of structures that operated in gray areas between jurisdictions.
The central bank, along with other financial agencies, made it clear that virtual currencies do not enjoy the same legal status as fiat currency. Under this criterion, business activities associated with them were reclassified as illegal financial conduct, unless expressly authorized by the competent authorities.
With this move, the authorities explicitly raise the compliance threshold for market participants and service providers who have been supporting token issuances or tokenized real-world asset platforms.
What the new regulatory framework in China requires
One of the most sensitive points of the advisory is the prohibition of the unauthorized issuance abroad of yuan-linked stablecoins by domestic companies or their offshore subsidiaries. From now on, any initiative of this kind requires explicit approval, closing the door to schemes that until now operated outside the direct regulatory framework.
The tokenization of real-world assets was also addressed forcefully. The notice explicitly categorized it as an illegal financial activity within mainland China, extending the prohibition not only to issuers but also to intermediaries and IT service providers involved in these operations.
Furthermore, entities and individuals outside the country are prohibited from offering crypto tokenization services to domestic counterparties unless such activities are carried out on approved financial infrastructure and have formal authorization. This reinforces territorial control over digital value flows.
From a market perspective, the authorities justified the measures as a defense of monetary sovereignty and financial stability. In practice, the restriction on yuan-linked stablecoins abroad could cause a structural shock to offshore liquidity denominated in that currency by eliminating a key source for rapid cross-border transfers.
