Seven of China's largest financial associations have declared Tokenize of real assets (RWA), stablecoins, and cryptocurrency mining illegal, marking a significant tightening of regulations.
China continues to tighten control over the digital asset industry as its leading financial associations officially classify Tokenize of real-world assets as a high-risk and illegal activity.
According to an announcement Chia by Wu Blockchain on Monday, seven organizations—including the China Asset Management Association, the National Internet Finance Association, the China Banking Association, the China Securities Association, the China Futures Contract , the China Association of Public Companies, and the China Clearing and Settlement Association—have changed their stance on Tokenize real assets.
Associations no longer XEM RWAs as a new technology requiring regulatory clarification, but rather as a high-risk business model. The list of illegal activities related to crypto assets now includes RWAs, stablecoins, “air coins”—a term referring to Token with no real value—and mining.
The new definition creates serious legal risks.
According to the associations, Tokenize real assets involves Capital and trading activities conducted through the Token Issuance or certificates of similar nature. This activity carries significant risks, including asset fraud, operational failure, and speculative inflation. More importantly, the associations emphasize that no Tokenize of real assets has yet been approved by China's financial regulators.
This policy change effectively defines participation in RWA as a prohibited Capital and trading activity under Chinese law, putting the entire sector at risk of suppression. Wu Blockchain analyzes the regulatory body's message as extremely decisive, stating that real-world financial risks completely outweigh any technological benefits. Notably, the document makes no mention of technical pilot programs, tiered regulations, or prudent development, suggesting that the regulatory goal is not to optimize RWA but to completely remove it from the legal framework.
This move is part of a chain of ongoing tightening measures by Beijing. In October 2025, the People's Bank of China and another regulatory body advised domestic technology companies against pursuing stablecoin schemes, reflecting the government's deep concerns about private digital assets.
Meanwhile, China is actively promoting its state-controlled digital yuan. Commercial banks in China were allowed to pay interest on balances held in digital yuan wallets last week, incentivizing users to switch to the state-controlled digital currency.
Coinbase's chief policy officer, Faryar Shirzad, warned in December that debates over the implementation of stablecoin laws in the US could undermine the country's position amid competition from China to promote the digital yuan for global payments. Although the GENIUS Act, passed in July 2025, provides a legal framework for stablecoin payments, pressure from banks regarding stablecoin rewards is slowing rollout, creating a competitive vacuum for China to exploit.
