This isn’t China embracing crypto; moderately, it’s China embracing tokenization in its personal means.
By Bo Cai
February 6, 2026—a date value remembering.
At present, the Individuals’s Financial institution of China (PBOC), collectively with seven different ministries and commissions—the Nationwide Improvement and Reform Fee (NDRC), the Ministry of Industry and Info Technology (MIIT), the Ministry of Public Safety (MPS), the State Administration for Market Regulation (SAMR), the Nationwide Monetary Regulatory Administration (NFRA), the China Securities Regulatory Fee (CSRC), and the State Administration of International Alternate (SAFE)—issued the Discover on Additional Stopping and Addressing Dangers Associated to Digital Currencies and Different Issues (Yinfa [2026] No. 42). Concurrently, a extremely sensible annex—the Regulatory Pointers on Tokenized Asset-Backed Securities Issued Overseas Utilizing Home Property—was additionally launched.
This isn’t a easy “ban.” In case your understanding nonetheless stops at “China is banning crypto once more,” you’ve seemingly utterly misinterpret this doc.
Let me break down each paperwork in plain language.
Eight ministries issued a comparable discover again in 2021—Yinfa [2021] No. 237, generally identified in the trade because the “September 24 Discover.” That discover established China’s coverage of “complete containment” towards digital currencies. 5 years later, Article 19 of the brand new Discover explicitly states: “The Discover on Additional Stopping and Addressing Dangers Associated to Digital Forex Buying and selling and Hypothesis (Yinfa [2021] No. 237), collectively issued by the PBOC and 9 different departments, is hereby repealed.”
Abolishing the outdated to determine the brand new indicators that this isn’t merely a patch—it’s a systemic regulatory overhaul. So what’s the largest distinction between the brand new and outdated notices?
One phrase: RWA.
The 2021 September 24 Discover centered totally on digital currencies; at the moment, the idea of “RWA” (actual-world asset tokenization) barely existed in China’s regulatory lexicon. Against this, Yinfa [2026] No. 42 devotes substantial house to defining and regulating RWAs—an unmistakable sign that regulators formally acknowledge RWA as a reputable enterprise mannequin and intend to set clear rules for it, moderately than rejecting it outright.
Key Level One: The stance on digital currencies stays unchanged—however the wording is extra exact
Article 1, Paragraph 1 of Yinfa [2026] No. 42 opens unequivocally: “Digital currencies don’t maintain authorized standing equal to that of authorized tender.” Bitcoin, Ethereum, USDT, and others are explicitly named and outlined as “non-authorized-tender devices that should not—and can’t—flow into or be used as forex in the market.”
Subsequent language intently follows that of the September 24 Discover: “All home actions—together with fiat-to-digital-forex alternate, digital-forex-to-digital-forex alternate, provision of buying and selling intermediation or pricing providers, and preliminary coin choices (ICOs)—are strictly prohibited and shall be resolutely abolished in accordance with legislation.” Providers offered to home customers by abroad entities are likewise banned.
But one essential new clause seems: “No entity or particular person, whether or not home or abroad, might concern RMB-pegged stablecoins overseas with out prior approval from related competent authorities.” Observe the phrasing: “with out prior approval,” not “strictly prohibited.” What does this indicate? In concept, if such issuance receives formal, lawful, and regulatory-compliant approval, RMB-pegged stablecoins may observe a compliant pathway. The opening is slim—nevertheless it exists.
For digital forex buyers, frankly, there’s little novelty right here. What was banned stays banned; what was cracked down on continues to be cracked down on. Mining operations stay beneath scrutiny; promoting continues to be suppressed; even firm registration names and enterprise scopes might no longer embody phrases like “digital forex,” “cryptocurrency,” or “stablecoin.”
Key Level Two: For the primary time, an official definition of RWA seems in a ministerial-stage doc
That is probably the most noteworthy a part of Yinfa [2026] No. 42. Article 1, Paragraph 2 supplies an exceptionally clear official definition:
“Actual-world asset tokenization refers to actions involving the usage of cryptographic and distributed ledger—or comparable—applied sciences to transform possession rights, earnings rights, and different rights related to property into tokens (or ‘digital tokens’) or different devices possessing token-like traits—together with fairness or debt certificates—and to concern and commerce such devices.”
This definition carries a number of important implications. First, it restricts the technological basis of RWA to “cryptographic and distributed ledger—or comparable—applied sciences”—i.e., blockchain or blockchain-like applied sciences are a prerequisite. Second, the scope of property eligible for tokenization—“possession rights, earnings rights, and many others.”—is extraordinarily broad, overlaying every thing from actual property and accounts receivable to bonds and fund shares, theoretically all inside attain. Third, each the “issuance” and “buying and selling” phases fall squarely beneath regulatory purview.
Nonetheless, the true crux lies in the subsequent sentence:
“Actions performed on designated monetary infrastructure platforms, with prior approval from the competent enterprise authority in accordance with legislation and regulation, are exempted.”
In plain language: RWA shouldn’t be categorically prohibited inside China—however it could actually solely be performed upon acquiring official authorization and solely on monetary infrastructure platforms permitted by regulators. The phrase “designated monetary infrastructure” is especially telling. What qualifies as “designated monetary infrastructure”? The discover doesn’t enumerate particular examples—however based mostly on present observe in China, candidates seemingly embody the Shanghai Information Alternate, the Beijing Worldwide Massive Information Alternate, the Shenzhen Information Alternate, regional monetary asset exchanges, and the PBOC-led digital RMB infrastructure.
In different phrases, Yinfa [2026] No. 42 doesn’t say “RWA is banned”; it says, “If you wish to do RWA, you should do it in my area.”
Key Level Three: A proper regulatory framework now governs tokenization of home property overseas
Chapter IV of Yinfa [2026] No. 42—“Strict Regulation of Home Entities Partaking in Associated Actions Overseas”—is probably the most groundbreaking part of the complete discover. It doesn’t say “you could not go overseas”; moderately, it says “you could go overseas—however you should observe the rules.”
Article 14 distinguishes amongst a number of eventualities: RWA performed overseas in the type of international debt falls beneath the NDRC and SAFE; RWA performed overseas based mostly on home rights and resembling asset securitization or fairness financing falls beneath the CSRC; all different types of RWA fall beneath the CSRC’s oversight, coordinated with different related departments. The core precept is “similar enterprise, similar threat, similar rules”—no matter whether or not issuance happens in Hong Kong or Singapore, Chinese language regulators will assert jurisdiction over any RWA whose underlying property reside in mainland China.
What does this imply? Till now, the largest impediment going through Chinese language home property in search of cross-border RWA tokenization has by no means been know-how or market demand—however moderately the regulatory gray zone. Many challenge groups needed to proceed however dared not: missing specific rules, their actions risked falling into authorized limbo—neither clearly lawful nor clearly illegal. Yinfa [2026] No. 42 lastly spells out the rules: It’s possible you’ll proceed—however solely after formal approval or submitting.
The accompanying Regulatory Pointers on Tokenized Asset-Backed Securities Issued Overseas Utilizing Home Property (hereinafter the “Pointers”) additional particulars precisely the right way to proceed.
Key Level 4: CSRC submitting system—concrete pathway established for tokenized asset-backed securities
The Pointers signify probably the most operationally vital doc of this spherical, particularly establishing a submitting regime for the state of affairs the place “home property function the idea for issuing tokenized asset-backed securities overseas.”
The core submitting course of outlined in the Pointers is as follows: The home entity holding precise management over the underlying property should file with the CSRC, submitting a submitting report, full set of abroad issuance documentation, and full disclosures overlaying data on the home filer, the underlying property, and the token issuance plan. Upon receipt of full and compliant supplies, the CSRC completes the submitting process and publishes the consequence; noncompliant submissions are rejected.
Observe rigorously: That is a “submitting” system—not an “approval” system. Though the CSRC “might, at its discretion, solicit opinions from related State Council departments and sectoral regulatory businesses,” the general institutional design is predicated on submitting—a considerably extra versatile strategy than approval. This displays a cautiously open regulatory stance towards cross-border tokenized asset-backed securities utilizing home property—not a inexperienced gentle, however actually not a welded-shut door both.
The Pointers additionally lay out a clear detrimental record: property legally prohibited from financing, property threatening nationwide safety, controlling individuals with prison data, entities presently beneath investigation, underlying property entangled in main possession disputes, and property already barred beneath present home asset securitization detrimental lists—all are disallowed.
These restrictions intently mirror these governing present home asset securitization and abroad listings by Chinese language enterprises—indicating that regulators have intentionally built-in RWA tokenization into the established securities regulatory framework, moderately than constructing a wholly new one from scratch.
Key Level 5: Monetary establishments’ roles are strictly outlined
Article 6 of Yinfa [2026] No. 42 imposes strict necessities on monetary establishments: They need to not present account opening, fund switch, clearing and settlement, or associated providers for digital forex–associated actions. Nonetheless, for RWA actions, the restriction applies solely to these “undertaken with out approval”—that means that, for compliant RWA actions duly filed or permitted, monetary establishments are permitted to offer custody, clearing, settlement, and different providers.
This distinction carries immense significance for the complete trade. To scale up, RWA tasks require lively participation from conventional monetary establishments—custodian banks, clearing organizations, fee gateways—infrastructure-stage gamers. By explicitly separating “compliant RWA” from the detrimental label of “digital forex,” Yinfa [2026] No. 42 removes key coverage limitations stopping monetary establishments from participating in RWA enterprise.
Article 15 additional stipulates that abroad subsidiaries and branches of home monetary establishments offering RWA providers overseas should function “in accordance with legislation and prudently”: they need to deploy certified personnel and methods, implement KYC, suitability administration, anti-cash laundering (AML), and different necessities, and absolutely combine these actions into the compliance and threat-management administration methods of their home guardian establishments. In impact, this tells Chinese language monetary establishments’ abroad arms: “It’s possible you’ll conduct this enterprise—nevertheless it should be managed centrally beneath your group’s unified compliance framework; no regulatory arbitrage overseas.”
How ought to we interpret the general message conveyed by these two paperwork?
Viewing Yinfa [2026] No. 42 and the Pointers collectively reveals an exceptionally clear regulatory logic:
First, digital currencies and RWAs are explicitly decoupled. Digital currencies stay topic to stringent crackdowns—a place unwavering since 2017. But RWAs are no longer lumped generically into the class of “digital forex–associated actions.” As an alternative, they are handled as a reputable monetary enterprise mannequin able to working inside a outlined regulatory framework.
Second, home RWA operates beneath a “licensed operation” mannequin. Conducting RWA domestically requires doing so solely on regulator-permitted “designated monetary infrastructure.” Absent a license or formal approval, such exercise is deemed unlawful monetary exercise—absolutely in step with China’s lengthy-standing regulatory philosophy that finance is a licensed trade.
Third, cross-border tokenization of home property adopts a submitting-based mostly regime. This represents the only largest incremental growth. It establishes a compliant channel via which excessive-high quality home property can entry world capital markets through RWA. As the first regulator, the CSRC employs submitting—not approval—ensuing in a comparatively cheap threshold.
Fourth, monetary establishments’ participation in compliant RWA enterprise receives specific regulatory sanction. This supplies the foundational institutional structure for constructing the complete ecosystem. With out banks and clearing establishments, RWA stays mere theoretical abstraction.
From a broader macro perspective, the discharge of Yinfa [2026] No. 42 and the Pointers marks China’s formal transition—from “blanket prohibition” to “categorized regulation”—in its oversight of crypto property. Digital currencies proceed to face suppression, whereas RWAs—particularly these backed by actual property, structured with compliance rigor, and topic to regulatory submitting—are intentionally carved out from the targets of suppression and introduced into the formal monetary regulatory system.
This isn’t China embracing crypto. It’s China embracing tokenization—in its personal means.
