China Cracks Down on Crypto with Expanded Regulations

China's central bank has issued comprehensive regulations on February 6 banning real-world asset tokenization and offshore issuance of yuan-pegged stablecoins. The People's Bank of China explicitly named Bitcoin, Ethereum, and Tether as lacking legal tender status in Notice No. 42, signed by eight government agencies.

The directive replaces China's 2021 crypto ban with expanded restrictions targeting both domestic entities and their offshore subsidiaries. Chinese companies and the overseas vehicles they control cannot issue virtual currencies or conduct RWA tokenization without prior government approval.

Provincial governments must shut down all existing mining operations and block new projects, while financial institutions are prohibited from providing accounts, payments, custody, or insurance for crypto-linked products. Internet platforms cannot host crypto services or provide marketing for virtual currency activities.