- Trending
- Comments
- Latest
China has formally extended its cryptocurrency prohibition to cover renminbi-pegged stablecoins and tokenized real-world assets, with new guidance from the People’s Bank of China and the China Securities Regulatory Commission explicitly barring offshore issuance of RMB-backed stablecoins by any entity, domestic or foreign without prior Beijing approval.
The move underscores Beijing’s determination to prevent digital assets from encroaching on monetary sovereignty, even as Hong Kong, China’s special administrative region, pushes forward with a regulated stablecoin framework aimed at positioning itself as a global digital finance hub.
The notice was jointly issued by the People’s Bank of China and the China Securities Regulatory Commission, alongside other government agencies, and is designed to “prevent and resolve risks associated with virtual currencies.”
Under the expanded framework, virtual currencies and crypto mining remain fully prohibited, while new restrictions bring stablecoins and RWAs explicitly under the China crypto ban. Regulators said that any stablecoin issuance tied to the renminbi — even if conducted offshore — now requires prior authorization.
“No entity or individual, domestic or foreign, may issue RMB-pegged stablecoins outside the country without approval,” the notice said, emphasizing that stablecoins linked to legal tender can perform functions similar to money in circulation.
Officials framed the expanded China crypto ban as a safeguard against threats to monetary sovereignty. Stablecoins, regulators argued, risk undermining central bank control over currency issuance and cross-border capital flows, particularly when tied to the renminbi.
The guidance also bars domestic firms — and foreign companies under their control — from issuing any form of virtual currency worldwide unless they have secured the necessary permits under Chinese law.
Analysts say the language reflects Beijing’s concern that offshore issuance could still exert influence over onshore markets through digital channels, even without domestic trading platforms.
The notice reiterates strict controls on crypto mining, tasking the National Development and Reform Commission and related agencies with continued enforcement. Regulators cited recurring issues such as data centers masquerading as legitimate operations while secretly running mining rigs.
Officials also warned of operators relocating equipment between regions to evade oversight, and pointed to links between mining activity and speculative trading — practices firmly outlawed under the China crypto ban.
Beyond stablecoins, the new framework lays out detailed rules governing tokenized RWAs. Regulators defined tokenization as the use of encryption and distributed ledger technology to issue and trade rights tied to ownership, income, or other asset interests.
Providing technology or intermediary services for RWA tokenization within China may be deemed unlawful financial activity, the notice said. Prohibited conduct includes unauthorized public securities offerings, illegal trading of tokenized securities or futures, 
Provisions further deepen the China crypto ban, closing what some market participants viewed as a potential regulatory gray area.
The guidance does allow for narrow exclusions. Certain commercial operations may proceed if they rely on approved financial infrastructure and receive explicit authorization under existing laws.
In such cases, the entity exercising actual control over the underlying assets must file reports with the CSRC before participating. For offshore issuance, companies must submit detailed documentation covering asset structure, issuance strategy, and the domestic filing entity.
While mainland China reinforces the China crypto ban, Hong Kong is charting a sharply different course. The Hong Kong Monetary Authority is preparing to issue its first batch of stablecoin licenses, with a decision expected as early as March.
HKMA Chief Executive Eddie Yue told lawmakers that dozens of applications are under review following the passage of Hong Kong’s Stablecoins Ordinance, which requires permits for issuers operating in or linking tokens to the Hong Kong dollar.
The framework has attracted interest from major Chinese tech firms, including Ant Group and JD.com, according to the Financial Times. Preparations reportedly slowed after mainland regulators raised concerns — highlighting the delicate balance between Hong Kong’s autonomy and Beijing’s policy priorities.
China’s regulatory stance has tightened steadily since 2013, culminating in a sweeping ban on crypto transactions in 2021. Officials cite volatility, fraud, and illegal fundraising as persistent risks — themes that continue to justify the China crypto ban today.
Recent research has also linked stablecoins to cross-border money laundering and organized crime, reinforcing Beijing’s skepticism. Another strategic concern is the dominance of U.S. dollar-backed stablecoins, which Chinese policymakers view as extending American financial influence in the digital realm.
At a recent U.S. Senate Banking Committee hearing, the Treasury Secretary said he “would not be surprised” if Hong Kong’s digital asset push were interpreted as an attempt to build alternatives to U.S. financial leadership — a comment that underscores the geopolitical undertones shaping the China crypto ban.
The contrast between mainland China and Hong Kong has never been starker. On one side, the China crypto ban is expanding to cover nearly every digital asset use case. On the other, Hong Kong is betting that strict licensing and oversight can channel innovation without undermining stability.
For global crypto markets, the message is clear: China remains closed, cautious, and uncompromising. And with the latest expansion, the China crypto ban is not only holding firm — it is evolving to meet the next wave of digital finance.
