China Slams the Door on Private Yuan Stablecoins and RWA Tokenization, Outlawing Domestic and Foreign Issuers

In a definitive move to safeguard its sovereign monetary control, the People’s Bank of China (PBOC), alongside seven major regulatory bodies, has issued a comprehensive ban on the unapproved issuance of stablecoins pegged to the Renminbi (RMB) and the tokenization of Real-World Assets (RWA). This joint directive marks one of the most significant escalations in China’s long-standing crackdown on digital assets, explicitly targeting both domestic entities and foreign issuers who attempt to offer RMB-linked digital currencies to Chinese citizens or within the global market.

The central bank’s statement clarified that stablecoins pegged to fiat currencies perform the functions of legal tender "in disguise." By circulating as a medium of exchange without state oversight, these private digital tokens pose a perceived threat to China’s financial stability and its ability to manage capital flows. The PBOC emphasized that "no unit or individual at home or abroad may issue RMB-linked stablecoins without the consent of relevant departments." This effectively ends any speculation regarding a potential reversal of China’s 2021 crypto ban, which some had hoped might soften to allow private-sector innovation in the stablecoin space.

Simultaneously, the ban extends to the burgeoning sector of RWA tokenization. Regulators characterized these activities as "illegal financial activities," citing concerns over financial scams and the inherent difficulty in enforcing legal ownership of physical assets via blockchain-based tokens under current Chinese law. The China Securities Regulatory Commission (CSRC) warned that unauthorized RWA projects could be prosecuted as illegal public securities offerings. This move is particularly impactful given the global growth of the RWA market, which has recently seen heavy involvement from traditional financial giants like BlackRock.

Furthermore, the directive introduces a strict "joint liability" framework. Chinese technology firms, marketing agencies, and payment processors are now legally barred from providing any infrastructure, promotional services, or financial pipelines to unauthorized stablecoin or RWA projects. This applies even if the project is headquartered outside of mainland China, effectively creating a "Great Firewall" against decentralized financial services. By stifling these private alternatives, Beijing continues to clear the path for its official Central Bank Digital Currency (CBDC), the digital yuan (e-CNY), ensuring it remains the sole authorized digital representation of the national currency.

Posted Using INLEO