Why is it that while eight ministries are strengthening regulation of virtual currencies, the China Securities Regulatory Commission (CSRC) has simultaneously opened a door for domestic assets to issue asset-backed securities (ABS) tokens overseas? Yesterday, Chinese regulators issued two regulatory documents: the first, jointly issued by eight ministries, strengthens regulation of virtual currencies, prohibiting the provision of virtual currency services to domestic entities, the issuance of stablecoins pegged to the RMB overseas, the issuance of virtual currencies overseas, and the continuation of overall mining activities, continuing the previous stringent measures. Furthermore, overseas entities are prohibited from issuing stablecoins pegged to the RMB, and overseas entities controlled by overseas entities are prohibited from issuing virtual currencies, clearly expanding the scope of the crackdown compared to before.
The second regulatory document issued by the China Securities Regulatory Commission (CSRC) regarding the issuance of asset-backed securities tokens overseas by domestic assets also contains many strict provisions. However, it also clarifies that as long as the domestic entity that actually controls the underlying assets has complete, accurate, and correct filing information, it can actually issue asset-backed securities tokens overseas.
Why is the issuance of asset-backed securities tokens by overseas entities permitted? Here's my personal understanding:
1. The China Securities Regulatory Commission (CSRC) does not use the concept of RWA. The official definition is a security token backed by assets issued overseas with domestic assets.
The document also explicitly states that the tokens must be used to represent equity based on the generated cash flow, rather than ownership of other assets.
If the domestic assets meet the requirements, they must first be registered with the China Securities Regulatory Commission (CSRC). Whether the registration is approved depends primarily on the CSRC. The CSRC's regulatory documents also clearly stipulate the conditions that must be met.
2. From this perspective, it shows that domestic regulators actually understand the true intention of putting assets on the blockchain: the US is promoting asset tokenization in order to allow dollar assets to siphon global liquidity through the blockchain. Chinese assets can also do the same, issuing asset-backed securities tokens overseas and having funds flow back into China to support the real economy.
The reason why the issuance of stablecoins pegged to the RMB is not yet attractive is that, although the domestic regulators have opened the door, they are still strictly prohibiting such illegitimate and questionable products.
Asset-backed security tokens, which are also on-chain forms such as ABS securitization, are less likely to encounter major problems like stablecoins.
3. Activating Existing Assets: Traditional asset securitization (ABS) is an important tool for activating existing assets: it packages future cash flows (such as accounts receivable, infrastructure revenue, commercial real estate rentals, etc.) into securities, allowing holders to obtain liquidity and issuers to realize their gains in advance. China's domestic asset securitization market is relatively mature, but it still faces problems such as scale limitations, long approval cycles, and a single investor structure.
Issuing asset-backed securities (ABS) tokens overseas can theoretically leverage the liquidity of the global blockchain market, lower issuance costs, and 24/7 trading to further broaden financing channels and improve asset liquidity. This is especially suitable for assets with large existing assets but poor liquidity (such as infrastructure, commercial real estate, and supply chain finance assets).
This is consistent with China's policy in recent years to vigorously promote REITs and infrastructure REITs to revitalize existing assets—both aim to "turn dead money into live money and support financing for the real economy."
It's not a complete liberalization, but rather "strict regulation," reflecting a refined balance in supervision: severely cracking down on illegal speculation (to prevent a repeat of the chaos in the crypto before 2021), while leaving room for compliant innovation and allowing high-quality existing assets to obtain overseas liquidity support under controllable conditions. Regulators have repeatedly emphasized "preventing speculative risks" and "maintaining monetary sovereignty," meaning any circumvention or disguised operations will still be severely punished, and the initial scale is unlikely to be large (due to registration thresholds, foreign exchange controls, etc.), making it more of a pilot, supplementary tool than a mainstream channel.
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