China Cracks Down on Crypto with Sweeping New Regulations

China's central bank has issued sweeping regulations banning real-world asset tokenization and offshore issuance of yuan-pegged stablecoins. The move, effective immediately, replaces a previous crypto ban from 2021 with expanded restrictions targeting both domestic entities and their offshore subsidiaries.

The People's Bank of China explicitly named Bitcoin (BTC), Ethereum (ETH), and Tether (USDT) as lacking legal tender status in the directive. Chinese companies and their overseas vehicles cannot issue virtual currencies or conduct RWA tokenization without prior government approval, while foreign entities providing crypto or RWA services to Chinese residents are also affected.

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