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Seven major associations in China’s financial industry have issued a joint risk warning, marking the most comprehensive crackdown on cryptocurrencies since the 2021 ban that forced all cryptocurrency exchanges out of the country.
Associations include banks, securities, funds, futures, payment processing, listed companies and online finance. They stated that all business activities related to digital currencies, including stablecoins, staking, mining, and especially converting real assets into tokens (RWA), are illegal in China.
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Real world asset tokens are within the scope of regulation
Statementwhich was released on December 5, explicitly stated that Chinese financial regulators “have not approved any activity to tokenize real assets,” making it the country’s first official RWA ban.
Investigator’s explanation The last time this coalition acted was on September 24, 2021. It was when 10 government departments jointly published a “Notice on further prevention and management of speculative risks in virtual currency trading”. This forced all cryptocurrency exchanges to exit China and shut down all mining operations. China’s share of the global Bitcoin hashrate has dropped by 75%.
The move comes as the global tokenization of real assets (RWA) surpasses $30 billion in market capitalization. Big players like BlackRock’s $2 billion BUIDL fund — which has been tokenized by Securitize and accepted as collateral on Binance, Crypto.com, and Deribit — are pushing toward mainstream adoption.
Chinese regulators seem concerned that the tokenization of real assets could become a sophisticated tool for capital flight. The mechanism will allow individuals to tokenize local assets, transfer them to offshore wallets, and exchange them for foreign currencies – all while bypassing traditional banking and exchange controls.
Streamline implementation with multi-agency coordination
The statement emphasized that virtual currencies, including stablecoins and tokens, such as Pi, lack legal status and cannot be traded in China. Individuals and organizations are prohibited from issuing, exchanging or raising funds via RWA or virtual currencies in mainland China. This restriction also applies if offshore companies employ employees based in China.
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These procedures come in coordination later November 28 meeting of the People’s Bank of China (PBoC) with senior government officials. Authorities have said that stablecoins are a form of virtual currency that is vulnerable to prosecution.
The December report noted a 37% year-over-year increase in money laundering related to virtual assets, reinforcing the push toward strict enforcement.
The joint statement between the seven associations creates what analysts have described as a “four-layer siege”. This includes cutting mining infrastructure, blocking payment channels for stablecoins, closing RWA routes, and eliminating fraudulent schemes like the Pi Network.
The warning also draws a clear line with Hong Kong’s friendly approach to cryptocurrenciesnoting that “mainland employees of offshore virtual currency service providers” will face legal consequences. Instead, China promoted the digital yuan (e-CNY) as a state-approved alternative.
Hong Kong launched its stablecoin licensing system on August 1, 2024, attracting 80 applicants, with the first approvals expected in early 2026. Licensed platforms such as HashKey and OSL continue to operate virtual asset exchanges. The city also allows coding experiments for RWAs, but they are strictly limited to external assets and non-local users.
The discontent of young people simmers under the surface
The ban has sparked intense debate online, particularly among young investors who feel excluded from global cryptocurrency opportunities. I explained BigNews Frustration among young people, driven by hopes of getting rich quick amid the rise of Bitcoin and friendly US regulations for cryptocurrencies.
Discussions in online communities reveal disappointment over the policy gap between China and Western countries. Critics argue that a complete ban hurts innovation beyond legitimate investor protection.
