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Chinese regulators have banned the unauthorized issuance of yuan-pegged stablecoins, extending restrictions to tokenized financial assets denominated in renminbi both onshore and offshore.
The joint notice, issued Friday by the People’s Bank of China and seven other agencies, reflects Beijing’s push to maintain strict monetary control as global stablecoin adoption accelerates.
The joint statement made clear that a yuan-pegged stablecoin is viewed by regulators as more than a technical innovation.
Authorities argued that fiat-linked tokens “perform some of the functions of fiat currencies,” making their circulation outside regulatory oversight a direct challenge to the stability of the renminbi.
The notice said that issuing or facilitating yuan-linked digital tokens without approval constitutes illegal financial activity.
It applies to both individuals and institutions, regardless of whether they are based inside or outside mainland China, if their products are accessible to users within the country.
The restrictions also extend to tokenized real-world assets, including blockchain-based representations of bonds, equities, or other financial instruments denominated in renminbi.
Overseas platforms are barred from marketing or providing such services to users in China without explicit authorization.
By tightening controls on yuan-pegged stablecoin issuance, Beijing is signaling that private digital currencies tied to its sovereign unit will not be tolerated alongside official monetary tools.
The latest policy builds on China’s sweeping 2021 crackdown that effectively removed cryptocurrency trading and payments from the domestic financial system.
The PBOC reiterated in the notice that digital assets such as Bitcoin and Ether do not have legal tender status in China and that facilitating crypto transactions remains prohibited.
Legal scholar and former sovereign wealth fund executive Winston Ma said the rules apply broadly across currency formats.
“The restrictions cover both the onshore and offshore versions of the renminbi,” — Winston Ma, adjunct professor at NYU School of Law, said in public commentary.
The offshore yuan, known as CNH, is designed to allow greater flexibility in international markets while preserving China’s capital controls.
By extending the ban to offshore issuance, regulators appear intent on preventing any yuan-pegged stablecoin from gaining traction beyond their supervision.
This approach contrasts sharply with jurisdictions that view regulated stablecoins as a way to modernize payments and financial infrastructure.
China’s clampdown on yuan-pegged stablecoin issuance aligns with its long-running effort to promote the state-backed digital yuan, known as the e-CNY.
Rather than allowing private issuers to tokenize the renminbi, Beijing has prioritized a centrally controlled digital currency integrated into the existing banking system.
Last year, the PBOC unveiled a framework allowing commercial banks to pay interest on balances held in digital yuan wallets beginning January 1, 2026.
The policy is designed to increase adoption and embed the e-CNY more deeply into everyday financial activity.
“The change will move the e-CNY beyond a simple digital form of cash,” — Lu Lei, Deputy Governor, People’s Bank of China, said when outlining the policy. He added that it would allow the digital yuan to integrate into banks’ asset and liability management.
China briefly explored limited pilot programs involving private yuan-linked tokens in 2025 but later halted those efforts.
The latest ban suggests that regulators have decisively chosen a centralized path over market-driven experimentation.
China’s hardline stance on yuan-pegged stablecoin issuance stands in contrast to regulatory developments elsewhere in Asia.
Japan introduced a comprehensive legal framework for stablecoin issuance in 2023, allowing licensed banks and trust companies to issue fiat-backed tokens.
Hong Kong, meanwhile, is preparing to launch a stablecoin licensing regime later this year.
Globally, stablecoin usage continues to expand rapidly. Total transaction value reached $33 trillion in 2025, up 72% from the previous year, according to Bloomberg data compiled by Artemis Analytics.
USDC led by transaction volume at $18.3 trillion, while Tether’s USDT processed $13.3 trillion and retained the largest market capitalization at $187 billion.
The surge followed the passage of the GENIUS Act in July 2025, which established the first comprehensive U.S. regulatory framework for payment stablecoins.
Against that backdrop, China’s ban on yuan-pegged stablecoin issuance highlights a clear divergence in regulatory philosophy.
While other major economies seek to regulate and integrate private stablecoins, Beijing is reinforcing state control over digital representations of its currency.
For policy makers and investors, the message is unambiguous: any future growth in renminbi-linked digital assets will flow through official channels, not privately issued stablecoins operating beyond China’s reach.
