Seven major financial industry associations in China have jointly issued a risk warning. This is the most comprehensive crackdown on cryptocurrencies since the expulsion of all cryptocurrency exchanges in 2021.
This association includes banks, securities, funds, futures, payment settlement, listed companies, and internet finance. They specified that all cryptocurrency-related business activities, including stablecoins, airdrops, mining, and tokenization of real-world assets (RWA), are illegal in China.
Real-world asset tokenization, regulatory target
This statement was issued on December 5. It stated that the Chinese financial regulatory authorities have 'not approved real-world asset tokenization activities.' This marks the first official ban on RWA.
A researcher explained that the last time this coalition was mobilized was on September 24, 2021. At that time, 10 government departments jointly issued a notice on 'additional prevention and handling of speculative risks in cryptocurrency trading.' As a result, all cryptocurrency exchanges were expelled from China, and all mining operations were halted. China's share of global Bitcoin hash rate plummeted from 75%.
This measure was announced at a time when global RWA tokenization exceeds a market size of $30 billion. Major players like BlackRock's $2 billion BUIDL fund are establishing themselves through traditional financial institutions.
Chinese regulatory authorities appear to be concerned that RWA tokenization could become a sophisticated tool for capital flight. This mechanism allows individuals to convert domestic assets into tokens and transfer them to overseas wallets, enabling them to exchange for foreign currency while circumventing traditional financial systems and foreign exchange regulations.
Strengthened crackdown through multi-agency cooperation
This statement emphasized that virtual currencies, including stablecoins and Pi coins, do not have legal status and cannot circulate within China. Individuals and entities cannot issue, exchange, or raise funds within mainland China through RWA or virtual currencies. These restrictions also apply if foreign companies are based in China.
This coordinated action occurred after a meeting with the PBoC on November 28. Authorities defined stablecoins as a form of virtual currency and declared them subject to legal penalties.
According to a report released in December, money laundering through virtual assets increased by 37% compared to the previous year. This highlights the need for strong enforcement.
A joint statement from seven associations creates a legal framework described as 'four-stage blockade.' This includes blocking mining infrastructure, shutting down stablecoin payment channels, closing RWA pathways, and eliminating fraudulent schemes like the Pi network.
This warning clearly delineated Hong Kong's pro-cryptocurrency approach. 'Employees of overseas cryptocurrency service providers in mainland China will be held legally accountable.' Instead, China promoted the digital yuan (e-CNY) as a government-approved alternative.
Hong Kong introduced a stablecoin licensing system on August 1, 2024. There were 80 applicants, and the first approvals are expected in early 2026. Licensed platforms HashKey and OSL continue to operate virtual asset exchanges. The city permits RWA tokenization trials, but this is strictly limited to offshore assets and non-mainland Chinese users.
Youth discontent simmering beneath the surface
This ban has sparked online debates among young investors who feel excluded from global cryptocurrency opportunities. BigNews's analysis highlighted the discontent of younger generations affected by the Bitcoin rally and the pro-cryptocurrency regulations in the U.S.
Discussions in online communities reveal disappointment over the policy differences between China and Western countries. Critics argue that an outright ban suppresses innovation alongside legitimate investor protection.
