China Expands Crypto Ban to Stablecoins and Tokenization
Beijing expands crypto restrictions, targeting renminbi-pegged stablecoins and tokenized assets.
China has moved to reinforce its hardline stance on digital assets, issuing a sweeping notice that extends its crypto crackdown to stablecoins and tokenized real-world assets (RWAs). The directive, released on Feb. 6 by the People’s Bank of China (PBOC) alongside seven regulatory bodies, underscores the country’s determination to keep speculative crypto activity outside its financial system while advancing the state-backed digital yuan.
The joint statement prohibits the unauthorized issuance of renminbi-pegged stablecoins and tokenized assets, applying to both domestic and foreign entities. It also reiterates China’s blanket ban on cryptocurrency activities, including trading, issuance and facilitation involving major digital assets such as Bitcoin, Ethereum and stablecoins like Tether’s USDT.
Expanded oversight targets stablecoins and RWAs
The notice signals a tightening regulatory perimeter around digital asset innovation. Authorities framed the move as a necessary response to rising speculative activity and emerging financial risks tied to tokenization.
“Recently, influenced by various factors, speculative activities related to virtual currencies and the tokenization of real-world assets have occurred frequently, posing new challenges and situations for risk prevention and control,” the notice said.
Under the updated rules:
- No entity — domestic or foreign — may issue renminbi-linked stablecoins without government approval.
- The restriction applies even to overseas branches of Chinese companies.
- Foreign firms and individuals are barred from offering crypto-related services inside China.
- Domestic entities are prohibited from issuing digital currencies abroad without regulatory authorization.
Authorities argue that stablecoins, which mirror the value of sovereign currencies, replicate core monetary functions and could undermine central bank oversight if left unchecked.
Tokenization faces tighter compliance requirements
China is also stepping up supervision of tokenized assets, an area gaining global momentum as financial institutions explore blockchain-based representations of equities, real estate and investment funds.
Companies seeking to tokenize assets overseas must now:
- Obtain formal approvals or file with regulators.
- Ensure financial and technology partners meet stricter compliance standards.
- Demonstrate adherence to cross-border financial regulations and risk controls.
The approach reflects Beijing’s broader strategy to limit speculative crypto exposure while maintaining oversight of emerging financial technologies.
Reinforcing a long-standing crypto ban
The latest measures build on years of restrictions that have shaped China’s crypto landscape.
- 2017: Authorities banned Initial Coin Offerings (ICOs), labeling them illegal fundraising and financial fraud. Domestic exchanges were ordered to halt fiat-to-crypto trading.
- 2021: China declared all crypto-related business activities illegal and launched a sweeping crackdown on mining operations.
- 2026: The new directive extends that framework to stablecoins and tokenization, tightening controls across evolving segments of the digital asset ecosystem.
Together, these policies reflect a consistent objective: prevent cryptocurrency from integrating into the formal financial system while retaining control over digital monetary innovation.
CBDC push continues as stablecoins restricted
The restrictions arrive as China accelerates development and adoption of its central bank digital currency, the digital yuan (e-CNY).
Officials have increasingly positioned the CBDC as a safer alternative to privately issued digital currencies. In January 2026, regulators approved a measure allowing commercial banks to share interest with users holding digital yuan balances, a move designed to make the state-backed currency more attractive.
By contrast, stablecoins pegged to fiat currencies face heightened scrutiny due to their perceived ability to bypass traditional financial oversight and challenge monetary sovereignty.
Brief consideration of yuan-pegged stablecoins
China’s stance has not been entirely static. Reports in August 2025 suggested authorities were considering allowing private companies to issue yuan-linked stablecoins — a potential shift in policy.
However, the momentum was short-lived. By September 2025, regulators instructed firms to pause or halt stablecoin trials, reaffirming caution toward privately issued digital currencies.
The new directive effectively cements that position, signaling that state-controlled digital money remains the priority, while private stablecoin initiatives remain tightly restricted.
Strategic implications for the crypto sector
The policy shift highlights a dual-track strategy: strict suppression of decentralized crypto activity alongside promotion of sovereign digital finance. By drawing a clear line between private digital currencies and state-issued alternatives, Beijing aims to manage financial risks while shaping the future of digital payments on its own terms.
The notice also underscores the global implications of China’s regulatory reach. By targeting foreign issuers and cross-border activity, authorities are asserting jurisdiction beyond domestic markets, reinforcing barriers to crypto integration within the country.
As tokenization and stablecoins gain traction worldwide, China’s stance signals a different path — one defined by centralized oversight, cautious experimentation and prioritization of the digital yuan. The latest crackdown suggests that while blockchain innovation may continue under strict supervision, privately issued digital currencies will remain firmly outside the boundaries of China’s financial system for the foreseeable future.
