Seven major associations in China's financial industry have jointly issued a risk warning, marking the most comprehensive crackdown on cryptocurrencies since a 2021 ban forced all crypto exchanges out of the country.
These associations include banks, securities, investment funds, futures, clearing, listed companies, and internet finance. They declared that all cryptocurrency-related businesses, including stablecoins, Airdrop, mining, and especially real asset (RWA) tokenization, are illegal in China.
RWA tokenization falls under regulatory scrutiny
The notice , released on December 5, stated that Chinese financial regulators “have not approved any real asset tokenization activities,” marking the first official ban on RWAs in the country.
A researcher explained that the last time the coalition was active was on September 24, 2021. That was when 10 government departments jointly signed the “Notice on Preventing and Handling Risks of Speculative Trading of Virtual Currency.” That action forced all cryptocurrency exchanges to leave China and shut down all mining operations. China’s global Bitcoin mining market share has plummeted from 75%.
The move comes as the global real-asset tokenization market exceeds $30 billion. Big names like BlackRock’s $2 billion BUIDL fund — tokenized by Securitize and accepted as collateral on Binance, Crypto.com , and Deribit — are driving mainstream adoption.
Chinese regulators appear to be concerned that tokenizing real assets could become a sophisticated tool for Capital flight, allowing individuals to convert domestic assets into Token, transfer them to offshore wallets, and exchange them for foreign currency—all while bypassing traditional banks and foreign exchange controls.
Enforcement tightened with multi-agency coordination
The notice reiterates that virtual currencies, including stablecoins and Token like Pi coin, have no legal status and cannot be circulated in China. Individuals and organizations are not allowed to issue, exchange, or raise Capital through RWA or virtual currencies within China. The restriction also applies to foreign companies with employees working in China.
The coordinated action follows a November 28 meeting between the PBoC and senior government officials, where the authorities declared stablecoins to be a form of virtual currency that is subject to prosecution.
A December report noted a 37% year-on-year increase in money laundering involving virtual assets, bolstering the need for tighter enforcement.
The joint statement by the seven associations creates what analysts describe as a “four-line defense.” This includes cutting off mining infrastructure, blocking stablecoin payment channels, blocking RWA pathways, and eliminating fraudulent programs like Pi Network.
The warning also drew a clear line under Hong Kong’s crypto-friendly approach , stating that “employees of offshore virtual currency service providers” in mainland China would face legal consequences. China instead promotes the digital yuan (e-CNY) as a state-sanctioned alternative.
Hong Kong launched its stablecoin licensing regime on August 1, 2024, attracting 80 applicants, with the first approvals expected in early 2026. Licensed platforms such as HashKey and OSL continue to operate virtual asset exchanges. The city also allows real-asset tokenization pilots, although limited to offshore assets and non-mainland users.
Youth discontent simmers beneath the surface
The ban has sparked a heated debate online, particularly among younger investors who feel excluded from global cryptocurrency opportunities. Analysis by BigNews has highlighted the frustration among young people, fueled by hopes of getting rich quick amid Bitcoin’s price surge and friendly regulations in the US.
Online community discussions have expressed frustration about the policy gap between China and Western nations, with critics arguing that blanket bans stifle innovation while protecting legitimate investors.
