On February 6, 2026, eight departments, including the People's Bank of China, the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Public Security, the State Administration for Market Regulation, the State Financial Regulatory Commission, the China Securities Regulatory Commission, and the State Administration of Foreign Exchange, jointly issued the "Notice on Further Preventing and Handling Risks Related to Virtual Currency" (Yinfa [2026] No. 42, hereinafter referred to as "Document No. 42").
Author: Bibi News
Cover: Photo by Sasun Bughdaryan on Unsplash
This article is not intended as investment advice. Readers are advised to strictly abide by local laws and regulations.
On February 6, 2026 , eight departments, including the People's Bank of China, the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Public Security, the State Administration for Market Regulation, the State Financial Regulatory Commission, the China Securities Regulatory Commission, and the State Administration of Foreign Exchange, jointly issued the "Notice on Further Preventing and Handling Risks Related to Virtual Currency" (Yinfa [2026] No. 42, hereinafter referred to as "Document No. 42").
On the same day, the China Securities Regulatory Commission (CSRC) simultaneously issued the "Regulatory Guidelines on the Issuance of Asset-Backed Securities Tokens by Domestic Assets Overseas" (hereinafter referred to as the "RWA Guidelines").
The two documents were released almost simultaneously, jointly outlining a clearer regulatory boundary and providing an institutional foundation for subsequent categorized governance.
Shift to Classification and Governance
In 2021, the "September 24 Notice" served as a strong deterrent to the chaos of virtual currency trading and speculation. The cleanup of domestic platforms and the rectification of mining were basically in place, and the related risks were significantly reduced.
However, recently, with the volatility of the global financial environment, the cyclical recovery of the crypto market, and the increasing complexity of cross-border capital flows, speculative activities related to virtual currencies and RWA tokenization have resurfaced.
Among them, RWA has become a new focus of risk, potentially intertwined with illegal fundraising, money laundering, and illegal cross-border fund transfers, making it more concealed, faster to spread, and more difficult to track.
With the underlying asset ownership confirmation, information disclosure, and risk isolation mechanisms still immature, related activities have already impacted the existing financial regulatory framework and become an important real-world context for regulators to intervene again.
While retaining the core spirit of the "September 24 Notice," the two documents, for the first time, stripped Real-World Asset Tokenization (RWA) out of the gray area of virtual currencies and incorporated it into a regulatory framework that is identifiable, distinguishable, and regulated.
This signifies that China's regulation of virtual assets has shifted from a crude, "one-size-fits-all" approach to a precise governance model based on clearly defined red lines and risk types.
Formation of the regulatory framework
In terms of their respective roles, the two documents have a very clear division of labor.
Document No. 42 is a general outline document, which serves to define the nature of the issue, set the tone, and draw red lines, clarifying which behaviors are off-limits and which risks must be strictly prevented.
The RWA guidelines, on the other hand, are a highly targeted set of specific rules that focus on the specific scenario of cross-border tokenization of domestic assets, and implement regulatory requirements at the operational level.
In terms of coverage, Document No. 42 brings virtual currencies, stablecoins, and RWA tokens under regulation, making up for the previous problem of fragmented regulatory targets;
Based on the RWA guidelines, identifiable business boundaries have been defined for RWA operations, which have long been in a gray area.
Thus, a preliminary framework for the regulation of virtual assets, with Document No. 42 as the general outline and the RWA guidelines as specific supplements, has been formed.
RWA has been officially defined
Circular 42 gave RWA an official regulatory status for the first time, and set clear prohibited areas and preconditions.
This means that RWA is no longer simply categorized into the vague category of "virtual currency," but is instead incorporated into the policy framework as a new type of risk that needs to be treated differently.
The document explicitly states that without approval in accordance with laws and regulations, no entity or individual may issue stablecoins pegged to the RMB overseas.
This is a rare "conditional prohibition" in regulatory documents. While it still appears to be a prohibition, the key phrase is "without approval," which, for the first time at the institutional level, leaves a theoretical possibility for compliant issuance.
This is both a rational response to the global trend of stablecoin development and a policy space reserved for the international expansion of the digital yuan ecosystem in the future.
Domestic and foreign regulatory boundaries
The regulatory approach embodied in Circular 42 and the RWA guidance is clearly separated into two different applicable scenarios.
At the domestic level , the principle remains strict prohibition.
Any activity involving the issuance or trading of RWA within the territory, or the provision of intermediary, custody, or information technology support services, may cross legal red lines such as illegal fundraising and unauthorized issuance of securities.
However, the document also retains a key exception: activities carried out based on specific financial infrastructure with the consent of the competent business authority in accordance with laws and regulations are excluded.
This statement implies that certain RWA projects may be eligible for a special pilot program.
At the international level , the regulatory approach has shifted to "not prohibiting, but strictly regulating".
Issuance of RWAs based on domestic assets overseas must adhere to the principle of "same risk, same rules," and be subject to review and constraints from different regulatory authorities depending on the nature of the underlying assets.
Those involving foreign debt are regulated by the National Development and Reform Commission (NDRC); those involving asset securitization and equity assets are regulated by the China Securities Regulatory Commission (CSRC); and those involving cross-border capital flows are managed by the State Administration of Foreign Exchange (SAFE). Other innovative forms are coordinated and led by the CSRC.
This differentiated regulatory arrangement, which distinguishes between domestic and foreign entities, essentially establishes an institutionalized channel for compliant cross-border asset tokenization activities while strictly safeguarding the bottom line of domestic financial security.
Within the system
Does this mean that China is beginning to loosen its restrictions on crypto assets?
The answer is: No.
The true significance of Document 42 and the RWA guidelines lies not in opening up virtual assets, but in extracting the tool of "tokenization" from the speculative narrative and reshaping it within the national regulatory system.
Technology can be used, but it must serve clear financial order objectives and operate within controlled institutional boundaries.
Under this framework, compliant RWA projects have the opportunity to enter the international market through registration, allowing high-quality Chinese assets to connect with global capital in a more efficient way; at the same time, it also removes policy obstacles for financial institutions to participate in the custody, clearing and other aspects of compliant RWAs in accordance with the law.
For practitioners, the red lines are clearer, and the path to compliance is now more transparent.
For ordinary investors, the warning remains clear: stay away from the high volatility and speculation of cryptocurrencies, and be wary of illegal fundraising under the guise of RWA.
In the future, as supporting regulations are gradually implemented, blockchain technology may indeed provide new tools for the real economy under strict supervision.
But there is only one premise: everything operates within the rules.
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