China continues to tighten its control over the cryptocurrency market as the People's Bank of China (PBOC) has just announced a series of new regulations aimed at reaffirming its tough stance on the digital asset sector. This move shows that Beijing is maintaining its strategy of tightly controlling crypto, despite the ongoing trend of legalization and expansion of blockchain applications in many major economies around the world.
According to the latest regulations, the PBOC XEM that cryptocurrencies remain illegal in China, and any business activities related to this asset class could be considered a violation of the law. China's top financial regulator requires domestic institutions, as well as foreign institutions under Chinese control, not to issue or engage in activities related to crypto assets without prior approval from the relevant authorities.
In addition, internet companies operating in China are also required not to provide any services that support trading, storage, promotion, or intermediary services related to cryptocurrencies. This regulation is seen as an attempt to close loopholes that some technology platforms have exploited to provide crypto-related services through indirect models.
A notable aspect of this latest round of tightening is China's expansion of control to the real world asset Tokenize (RWA) sector. This is a rapidly growing global trend, allowing the digitization of traditional assets such as real estate, bonds, commodities, or financial instruments into blockchain Token . However, the PBOC has declared that all RWA activities within the country are completely prohibited, including those involving stablecoins – digital assets Peg to fiat currency or traditional assets.
Not only is China restricting domestic participation, but it has also introduced regulations to limit the involvement of foreign organizations in the RWA sector if the service targets Chinese organizations or investors. This shows that Beijing is trying to prevent the flow of international Capital and blockchain technology from impacting its domestic financial system, especially in the context of the increasing development of decentralized finance models.
