China has signaled a renewed and more forceful push to tighten its grip on the cryptocurrency sector, reaffirming its long‑standing ban on virtual currencies while introducing stricter oversight of offshore token issuance tied to Chinese assets.
According to a Reuters report, Chinese authorities said they will closely scrutinize the offshore issuance of tokens backed by assets located onshore and have explicitly banned the unauthorized issuance of yuan‑pegged stablecoins outside the country.
China Tightens Crypto Controls
In a notice published on the People’s Bank of China’s website, regulators said domestic companies and overseas entities under their control are prohibited from issuing virtual currencies abroad without official approval.
The move effectively shuts the door on privately issued offshore yuan stablecoins, reinforcing Beijing’s position that cryptocurrencies cannot function as money within China’s financial system.
The announcement largely restates China’s existing prohibition on cryptocurrencies, but it also introduces new clarity around emerging areas of digital finance. Notably, some market participants see the language as a sign that China is laying the groundwork for regulating real‑world asset (RWA) tokenization.
Louis Wan, chief executive of Unified Labs, described the distinction made by regulators as a significant development. He said the key change lies in the clear separation between virtual currencies and RWA tokenization.
While cryptocurrencies remain banned, RWA activity is now being brought into the regulatory system. For China’s RWA sector, he called the move a milestone.
Crackdown On Private Stablecoins
China’s central bank also emphasized its control over digital currency issuance, underscoring that the digital yuan is the only legitimate form of state‑backed digital money.
Winston Ma, an adjunct professor at NYU School of Law, said the message from regulators is that there will be no tolerance for a mix of private yuan‑based stablecoins circulating on global crypto exchanges.
Officials said the tougher stance reflects concerns that recent speculative activity in virtual currencies has created “new risks” that require additional regulatory measures.
In a joint statement issued by the People’s Bank of China along with seven other government agencies, authorities reiterated that virtual currencies do not carry the same legal standing as traditional fiat money.
Regulators also warned that, without explicit approval, neither domestic firms nor their overseas affiliates are allowed to issue cryptocurrencies abroad. Both Chinese and foreign entities were barred from issuing offshore stablecoins linked to the yuan unless authorized.
Authorities noted that stablecoins pegged to fiat currencies can effectively perform some of the same functions as money in circulation, making them a particular focus of regulatory scrutiny.
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