How to Understand China’s New Rules on Tokenization and RWA?

Author | @bocaibocai_

Original Link:

https://mp.weixin.qq.com/s/-UMolMQbw4YahXCliHYPqg

February 6, 2026 — A Day to Remember

Today, eight major Chinese authorities — the People’s Bank of China (PBoC), National Development and Reform Commission (NDRC), Ministry of Industry and Information Technology (MIIT), Ministry of Public Security, State Administration for Market Regulation, National Financial Regulatory Administration (NFRA), China Securities Regulatory Commission (CSRC), and the State Administration of Foreign Exchange (SAFE) — jointly issued a pivotal document:

“Notice on Further Preventing and Handling Risks Related to Virtual Currencies and Similar Activities” (Yinfa [2026] №42).

At the same time, a more practical and detailed annex was released:

“Regulatory Guidelines for Offshore Issuance of Asset-Backed Tokenized Securities Based on Onshore Assets.”

This is not just another “crypto ban.”

If you’re still thinking “China banned crypto again,” you’re misunderstanding the document entirely.

Let’s break these two documents down clearly.

A Systemic Overhaul, Not Just a Patch

In 2021, the same authorities released a similar document — Yinfa [2021] №237, or the infamous “924 Notice,” which laid the foundation for China’s sweeping ban on virtual currencies.

Now, five years later, Document №42 explicitly states:

“Yinfa [2021] №237 is hereby repealed.”

This isn’t a patch. It marks a systematic restructuring of the regulatory framework.

The biggest difference between the new and old document? — RWA.

Back in 2021, RWA (real-world asset tokenization) didn’t exist in China’s regulatory vocabulary. But in this new notice, RWA is formally defined, acknowledged, and regulated. This signals a major shift:

Regulators are not banning RWA, but instead defining rules for it.

Key Point 1: Virtual Currency — Still Banned, but Wording is More Precise

Clause 1 of the new document begins clearly:

“Virtual currencies do not have the same legal status as legal tender.”

Bitcoin, Ethereum, USDT — all named. None are legal tender, and they cannot and should not be circulated as money.

As before, the following activities are strictly banned:

• Fiat-to-crypto and crypto-to-crypto exchanges

• Providing intermediary or pricing services

• Token issuance or fundraising

• Offshore platforms offering crypto services to China

But here’s a subtle new clause:

“Without approval, no entity or individual may issue RMB-pegged stablecoins offshore.”

This is a huge shift in tone. It doesn’t say “prohibited,” it says “not allowed without approval.” In theory, a compliant RMB stablecoin is now possible, with proper approval.

For investors? Nothing has changed:

• Mining is still under crackdown

• Crypto ads remain banned

• Corporate names and business scopes may not include “virtual currency,” “crypto,” “stablecoin,” etc.

Key Point 2: RWA is Officially Defined for the First Time

For the first time, a ministerial-level policy document defines real-world asset tokenization.

The definition:

“RWA refers to the use of cryptographic and distributed ledger or similar technologies to convert ownership, income rights, or other rights of real assets into tokens or token-like rights, and to conduct issuance and trading.”

This carries three key implications:

1. Blockchain (or similar) technology is a required foundation.

2. Tokenized assets include ownership rights, income rights, etc. — a broad scope ranging from property to receivables and fund shares.

3. Both the issuance and trading of RWAs fall under regulatory scope.

Crucially, it adds:

“Unless approved by competent authorities and conducted via designated financial infrastructure, such activities are prohibited.”

This means RWA is not banned, but must be conducted under regulatory oversight and within approved platforms.

What counts as “designated financial infrastructure”?

While the document does not list them explicitly, likely candidates include:

• Shanghai Data Exchange

• Beijing International Big Data Exchange

• Shenzhen Data Exchange

• Local financial asset exchanges

• PBoC-led digital RMB infrastructure

In short, regulators are saying:

You can do RWA — but only on our approved platforms and terms.

Key Point 3: Offshore Tokenization of Onshore Assets Has a Formal Regulatory Framework

Chapter IV of Document №42 introduces a compliance framework for domestic entities conducting tokenization of Chinese assets offshore.

This is not a blanket prohibition — it sets clear rules for going abroad.

Article 14 distinguishes several scenarios:

• If structured as foreign debt → under NDRC and SAFE

• If structured like ABS or equity → under CSRC

• Other forms → jointly regulated by CSRC and relevant authorities

The guiding principle:

“Same business, same risk, same regulation.”

Regardless of whether a project issues in Hong Kong or Singapore, if the underlying asset is located in China, Chinese regulatory jurisdiction applies.

This fills a critical gap in regulatory clarity.

Until now, many project teams hesitated to pursue offshore tokenization due to legal uncertainty.

Now, there is a rulebook:

It is permitted — but filing or approval is mandatory.

Key Point 4: Filing System for Offshore ABS Tokens

The accompanying Guidelines establish a filing-based system (not pre-approval) for offshore issuance of asset-backed tokenized securities based on onshore assets.

Under this system:

• The domestic entity controlling the underlying assets must file with CSRC.

• Required materials include a filing report, complete offshore issuance documentation, issuer and asset information, and tokenization plans.

• If compliant, CSRC processes and publishes the filing.

• If not, the filing is denied.

The use of a filing regime — rather than a strict approval regime — suggests cautious openness.

A clear negative list is provided:

• Assets banned from financing by law

• Assets involving national security risks

• Controllers with criminal records

• Assets under investigation or ownership disputes

• Any asset types already prohibited under domestic ABS rules

These conditions align RWA tokenization with China’s broader regulatory approach to capital markets.

Key Point 5: Financial Institutions Have a Clear Role in Supporting RWA

Article 6 of Document №42 reaffirms:

• For virtual currencies:

Financial institutions may not provide accounts, fund transfers, clearing, or settlement services.

• For RWA:

These services are allowed, provided the project is compliant and approved.

This clarification is significant.

Institutional involvement — banks, custodians, clearinghouses — is essential for any RWA ecosystem to grow.

Article 15 further states that:

• Overseas subsidiaries and branches of domestic financial institutions may engage in RWA business abroad

• They must ensure compliance with KYC, AML, and suitability standards

• All activities must be integrated into the parent company’s risk and compliance management

This ensures group-level oversight and prevents unregulated operations in overseas jurisdictions.

Regulatory Logic: Crypto vs. RWA

Taken together, Document №42 and its annex represent a clear shift in regulatory thinking:

1. Virtual currencies and RWA are now formally separated.

Crypto remains under strict prohibition, but RWA is treated as a financial business model that can exist within regulatory frameworks.

2. Domestic RWA requires licensed infrastructure.

Activities must be conducted via approved platforms, with permits or filings. RWA becomes a franchise-based financial activity.

3. Offshore tokenization follows a filing model.

This provides a clear legal path for compliant tokenization of Chinese assets for global markets. The CSRC is the primary regulator, applying a filing (not approval) process.

4. Financial institutions are permitted to participate in compliant RWA.

This paves the way for the full development of tokenization infrastructure.

Conclusion

China is not embracing crypto. China is embracing tokenization — on its own terms.

For institutions and project builders who have been waiting for clarity:

• The path is now visible

• The regulators are defined

• The red lines are drawn

• The filing system exists

The only question remaining is：Are you ready?