For years, Beijing has tightened restrictions on cryptocurrencies through a series of escalating measures. These include the 2017 ban on ICOs and domestic exchanges, the 2019–2020 regulatory framework that limited blockchain activity to government-approved use cases, and the sweeping September 2021 action that outlawed trading and mining nationwide.
In late November, the People’s Bank of China (PBoC) again reaffirmed that:
“Virtual currencies do not have the same legal status as fiat currencies, lack legal tender status, and should not and cannot be used as currency in the market.”
Now regulators are broadening the definition of illegal crypto activity, and RWA tokenization has become the newest target.
Seven Financial Associations Move in Unison to Outlaw RWA Tokenization
On December 5, seven of China’s most important financial industry associations - representing banking, securities, funds, futures, payment clearing, listed companies, and internet finance - issued a joint warning declaring that all RWA tokenization activities are illegal in mainland China.
The notice stated that regulators “have not approved any real-world asset tokenization activities,” marking the first time this emerging sector has been explicitly named alongside stablecoins, mining, and airdrops as prohibited.
The last time this coalition mobilized was September 24, 2021, when ten government departments jointly forced exchanges and mining farms to exit the country - an action that drove China’s share of global Bitcoin hashrate from roughly 75% to nearly zero.
Authorities warned that RWA tokenization poses serious risks including fake assets, project failures, and speculative trading. Officials are also concerned that tokenized assets could become a mechanism for capital flight, enabling domestic holders to convert traditional assets into digital tokens and send them offshore beyond banking and foreign-exchange controls.
The December notice reiterates that all virtual currencies, including stablecoins, “lack legal status” and cannot circulate within mainland China. Individuals and organizations are banned from issuing, exchanging, or raising funds using tokens or stablecoins. This applies even when the issuing company is offshore but employs staff based inside China, extending earlier enforcement boundaries.
A Turning Point for Global Tokenization Markets
China’s explicit ban on RWA tokenization arrives just as the global sector surpasses $30 billion in tokenized assets led by funds such as BlackRock’s $2 billion BUIDL. While other jurisdictions race to integrate blockchain-based capital markets, China is choosing the opposite approach: sealing off emerging rails to maintain capital controls and reduce systemic risk.
With this move, Beijing has extended the scope of its crypto prohibition to include one of the fastest-growing technologies in global finance, signaling that its zero-tolerance policy on decentralized assets remains firmly intact.