On March 13, 2026, Xinhua News Agency was authorized to release the full text of the "Outline of the 15th Five-Year Plan for National Economic and Social Development of the People's Republic of China." This guiding document, outlining China's development blueprint for the next five years, explicitly proposes in its fourth section, "Deepening the Construction of Digital China," to implement the national blockchain network construction project, strengthen the core industries of the digital economy, develop industries such as blockchain, and create internationally competitive digital industry clusters. More notably, the outline, for the first time, incorporates "actively participating in international governance in areas such as artificial intelligence, digital currency, and cross-border data flows" into its top-level design, explicitly proposing to reach more consensus on data security, privacy protection, and cross-border law enforcement cooperation, and to strengthen international judicial coordination and mutual recognition of rules. This marks the first time China has systematically deployed blockchain, digital currency, and cross-border data flows within the same framework in a national-level plan. Some observers interpret this as a "national blueprint for digital civilization infrastructure"—blockchain is the "trustworthy digital Great Wall," digital currency is the "digital blood system," and cross-border data flows are the "neural network" connecting the global digital economy. Just over a month before the release of this planning outline, on February 6th, eight departments, including the People's Bank of China, jointly issued the "Notice on Further Preventing and Handling Risks Related to Virtual Currencies" (Yinfa [2026] No. 42). On the same day, the China Securities Regulatory Commission (CSRC) issued the "Regulatory Guidelines on the Issuance of Asset-Backed Securities Tokens Overseas by Domestic Assets." These two documents, released on the same day, are considered by the industry to be "the most precise and complete legal normative documents in the current virtual currency business field." On one hand, there's the top-level setting of the "15th Five-Year Plan," and on the other, the detailed implementation rules of Document No. 42—the former pointing the way for the construction of Digital China, and the latter drawing red lines for RWA (Real Money Token) businesses. These two seemingly independent lines actually point to the same proposition: on the two sides of digital civilization, when the productivity represented by AI is released at an exponential rate, how can the production relations represented by blockchain and digital RMB ensure that value is fairly confirmed and compliantly transferred? Document No. 42 provides the answer in eight words: strict prohibition domestically, registration overseas . This regulatory framework, consisting of these eight words, draws a compliant channel for companies to go global with their RWA. But how exactly does one navigate this channel? What are the hurdles? Where is the red line? This article, based on the original policy text and interpretations from multiple authoritative law firms, dissects the truth behind the dual-track system for you.
I. From "one-size-fits-all" to "divide and conquer"
To understand Document No. 42, we must first trace the evolution of China's virtual currency regulation. The "94 Announcement" of 2017 halted ICO financing, and the "924 Announcement" of 2021 defined all virtual currency-related businesses as illegal financial activities. The regulatory logic at that time was a "one-size-fits-all" approach—regardless of Bitcoin, Ethereum, or various tokens, they were all considered homogeneous sources of risk. The regulatory authorities adopted a comprehensive ban strategy that was the lowest-cost and fastest-acting. However, Document No. 42 of 2026 brought about a fundamental change. First, the level of issuance was elevated. Document No. 42 was jointly issued by eight departments, including the People's Bank of China and the National Development and Reform Commission, and reached an agreement with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate. It was also approved by the State Council, significantly enhancing its level of issuance and legal effect compared to previous documents. Second, the scope of regulation expanded. Document No. 42, for the first time, includes "Real-World Asset Tokenization (RWA)" and "stablecoins" within the core scope of regulation, providing a clear definition: RWA refers to "activities that use cryptographic technology and distributed ledger or similar technologies to convert the ownership and income rights of assets into tokens or other rights or debt certificates with token characteristics, and then issue and trade them." More importantly, it represents an upgrade in regulatory logic. CMB International summarized in a research report that the core change in Document No. 42 is "removing compliant RWA businesses from the label of virtual currency-related businesses and incorporating them into the formal financial regulatory system." This means that regulators are beginning to distinguish between two completely different types of things: one is virtual currencies centered on speculation, and the other is RWA backed by real assets. Lawyers Zeng Xiao and Guo Lin from Jingtian & Gongcheng Law Firm believe this change reflects the regulators' forward-looking considerations: "If China is absent from the global RWA wave, it may lead to the loss of pricing power for high-quality Chinese assets. Therefore, under the premise of ensuring the effectiveness of the domestic financial firewall, limited access to the global digital asset market through the CSRC filing mechanism is a more prudent and realistic strategy." This is the underlying logic of the "dual-track system"—domestic and overseas, divided and governed separately.
II. Domestic Rail: The "Blocked" Firewall and the Only Narrow Gate
Article 1 of Circular 42 clearly draws a red line for RWA activities within China. The document explicitly states: "Activities involving the tokenization of real-world assets within China, as well as the provision of related intermediary and information technology services, that are suspected of involving illegal issuance of tokens, unauthorized public offerings of securities, illegal operation of securities and futures businesses, illegal fundraising, or other illegal financial activities, shall be prohibited." This means that any RWA issuance, trading, or intermediary services conducted within China are illegal. Pure technology companies or Web3 startups that build RWA platforms, issue tokens, or even simply provide technical support within China may be crossing the line. At the same time, Circular 42 also imposes unprecedentedly strict regulations on stablecoins: "Without the consent of relevant departments in accordance with laws and regulations, no entity or individual, whether domestic or foreign, may issue stablecoins pegged to the RMB overseas." Wang Wei, a partner at Tianyuan Law Firm, interprets this clause as "directly pointing to the red line of monetary sovereignty." The right to issue RMB stablecoins has been brought under state control. However, Circular 42 is not a complete ban. The first clause includes a crucial "exception": "Except for relevant business activities conducted based on specific financial infrastructure with the consent of the competent business authority in accordance with laws and regulations." What constitutes "specific financial infrastructure"? Zhu Weili, a lawyer at Junhe Law Firm, analyzes that this likely refers to four types of entities: national-level blockchain infrastructure and nodes (such as blockchain systems led by the central bank), licensed financial exchanges and their innovation sectors, official data exchanges, and other pilot platforms specially approved by the State Council or financial regulatory authorities. Li Si'an, a lawyer at DeHeng Law Firm, also points out that the threshold for this exception is extremely high—"specific financial infrastructure" must be a licensed institution or an official pilot platform; it is almost impossible for pure technology companies or startup teams to obtain the qualification independently. This means that while there is still room for RWA in China, this space is limited to a top-down experiment of "regulatory leadership + participation of licensed institutions + support from national-level infrastructure." For ordinary companies, conducting RWA in China is currently virtually impossible.
III. Overseas Rail: How to Establish Compliant Channels for "Facilitation"?
If Document No. 42 was responsible for "blocking," then the "Regulatory Guidelines" issued simultaneously by the China Securities Regulatory Commission (CSRC) were responsible for "guiding." The "Regulatory Guidelines" established a filing-based regulatory framework for the first time for "domestic assets issuing asset-backed securities tokens overseas." Junhe Law Firm described it as "historically providing a legal path for domestic assets to raise funds through overseas RWA (Real-Warranty Assets)."
Who can walk through this door?
The "Regulatory Guidelines" clarify that the filing entity must be a "domestic entity that actually controls the underlying assets." This means: First, the filing entity must be a domestic entity, not an offshore shell company. Second, the entity must have actual control over the underlying assets. Third, the assets must generate "stable and predictable cash flow." CMB International further summarizes that offshore RWA business can be divided into four types: foreign debt RWA (regulated by the National Development and Reform Commission), equity and asset securitization RWA (regulated by the China Securities Regulatory Commission), and other forms of RWA (jointly regulated by the China Securities Regulatory Commission and relevant departments). The "Regulatory Guidelines" first issue regulatory guidelines for asset securitization RWA, clearly indicating a pilot program approach.
Three steps to the filing process
According to interpretations from multiple law firms, the compliance path includes the following steps: Step 1: Pre-filing. Submit a filing report, a complete set of overseas issuance documents, information on underlying assets, and a token issuance plan to the China Securities Regulatory Commission (CSRC). The CSRC has issued "Guideline No. 1," specifying the requirements for the list of filing materials and the submission format. Step 2: Thorough verification. Regulators will conduct a thorough review of the underlying assets to ensure they are not within the negative list. The "Regulatory Guidelines" establish six negative lists, including areas prohibited by law for financing, areas endangering national security, areas where related entities have criminal records, and areas where the underlying assets have significant ownership disputes. Particularly noteworthy is the sixth item: "Underlying assets that fall under the prohibited circumstances stipulated in the negative list for domestic asset securitization business." This means that the quality standards for underlying assets are converging with traditional ABS—prohibiting assets related to local government debt, vacant real estate under construction, and rights certificates that cannot directly generate cash flow. Step 3: Continuous reporting. Timely reporting is required upon completion of issuance, occurrence of significant risks, or significant changes in the underlying assets. The domestic filing entity and its controlling shareholders, actual controllers, directors, supervisors, and senior management are responsible for the authenticity of the filing materials.
Cross-departmental collaborative supervision
The China Securities Regulatory Commission (CSRC) filing is only the first step. Zhong Lun Law Firm points out that registered companies also need to complete approval procedures from relevant regulatory departments regarding cross-border investment, foreign exchange management, and network and data security. For foreign debt registration, approval from the National Development and Reform Commission (NDRC) is required; for data export, security review by the Cyberspace Administration of China (CAC) is necessary; and the repatriation and settlement of raised funds must comply with foreign exchange management regulations. This "cross-departmental parallel supervision" mechanism reflects the functional regulatory principle of "same business, same risk, same rules." RWA is not considered a completely new financial business model, but rather is incorporated into the existing framework of traditional financial regulation—foreign debt is regulated by foreign debt management, securities by securities management, and cross-border capital flows by foreign exchange management.
V. When Regulation Meets Technology: The Role of AI Within a Compliance Framework
The issuance of Document No. 42 and the CSRC's "Regulatory Guidelines" has established a compliant channel for companies to expand their RWA (Resource-Based Asset) overseas, but it has also introduced unprecedentedly refined requirements: penetrating scrutiny needs to reach the underlying assets, cash flow forecasts must be "stable and predictable," and cross-border data flows face security reviews from the Cyberspace Administration of China. For companies with hundreds or thousands of dispersed assets, this means massive due diligence, continuous compliance monitoring, and complex document preparation. In this context, what role can AI play? First, in compliance applications. OpenAI's EVMbench, developed in collaboration with Paradigm, has entered the field of on-chain asset security. AI can assist in the analysis of transaction behavior required for penetrating supervision and can more accurately model and predict the returns of assets such as charging piles and photovoltaic power plants. AI can also play an important role in anti-money laundering and transaction monitoring. Second, in enabling overseas expansion. The preparation of filing materials involves extensive asset due diligence and legal documentation; AI can assist in the automated generation of compliance documents. In terms of data export compliance, AI can help achieve an architecture design of "de-identifying sensitive data domestically and only transmitting revenue data overseas." However, compliance boundaries must be strictly adhered to. The on-chain transaction functions and automatic execution of smart contracts by AI agents must be carried out under the premise of "overseas regulatory framework + domestic filing and consent". All activities involving domestic assets are still subject to the red lines of Document No. 42.
VI. Conclusion and Implications: What lies beyond the narrow gate?
One hundred days after the release of Document No. 42, we can now calmly see its full picture. It's not a "ban" on RWA, but rather an "instruction manual"—telling the market what is absolutely forbidden, what is permissible, and how to do it. The "strict prohibition within China" draws a bottom line for financial security. China's stance on cracking down on virtual currencies has never wavered; any "pseudo-RWA" attempting to circumvent regulations and raise funds from the public will be resolutely eliminated. Wang Wei of Tianyuan Law Firm reminds us that many practitioners misinterpret "technological neutrality" as "responsibility neutrality," but in regulatory logic, "technology is not exempt from inspection—when your product, content, or service leads users to an illegal trading ecosystem, technology will be included in the chain of responsibility." "Overseas registration" opens a narrow door for serving the real economy. For companies with high-quality assets, stable cash flow, and that align with national strategic directions, Document No. 42 plus the CSRC guidelines provide a workable and compliant path to overseas expansion—although the threshold is high and the cost is high, at least it is no longer a "gray area." Ouyang Xiaohong, chief observer of the Economic Observer, believes that the most underestimated value of Document No. 42 lies not in its "broad opening up," but in incorporating the possibility of "controlled pilot programs" into the policy text. For decision-makers of listed companies, the question now is not "Can RWA still be done?" but rather: Are my assets outside the "negative list"? Is my cash flow stable and predictable enough? Can I build a compliance team that meets the filing requirements? Do I have the capability for cross-border data compliance? If the answer is yes, then behind the narrow gate may lie a blue ocean. Mr. Zou, a practitioner currently involved in an RWA project in Hong Kong, describes the current situation as follows: "Finding assets, finding buyers, and finding channels all take time, but the policy window has indeed opened." As AI releases productivity at an exponential rate, RWA, as a bridge connecting the digital world and physical assets, requires compliant "channels" for its value transfer. The significance of Document No. 42 lies in installing "valve" for this channel—preventing the influx of speculative capital while preserving channels for asset transfers that truly serve the real economy. This is perhaps the beauty of the dual-track system: one track blocks risks, the other connects to the future. (This article is based on publicly available policy documents, authoritative media reports, and interpretations by law firms, and does not constitute any investment advice or compliance commitment. Please consult a professional institution before engaging in specific business. According to the "long-arm jurisdiction" principle of Document No. 42, even if overseas cases are discussed, it does not constitute an implication that domestic readers can participate. All activities involving domestic assets must strictly adhere to the "prohibited within China" red line.)
