China has moved to lock down virtually all crypto and real‑world asset (RWA) tokenization activity, issuing a new notice that declares such operations illegal financial activity and extends liability across the entire service stack. Summary A joint PBoC notice declares Bitcoin, Ether, Tether and similar tokens lack legal tender status and brands all virtual‑currency business activity as illegal finance to be “resolutely banned”. RWA tokenization is swept into the same risk bucket, with onshore issuance and trading prohibited absent explicit approval and offshore entities barred from serving mainland users. Core of the new notice The joint circular from the People’s Bank of China (PBoC) and seven other ministries states bluntly that “virtual currency does not have the same legal status as legal tender” and that tokens such as “Bitcoin, Ether, Tether…do not have legal compensation and shall not and cannot be used as currency in the market.” All “virtual currency‑related business activities” — including fiat–crypto exchange, crypto–crypto trading, market‑making, information intermediation, token issuance and crypto‑linked financial products — “are illegal financial activities” and are to be “strictly prohibited” and “resolutely banned.” Real‑world asset tokenization is folded into the same risk bucket. Authorities define RWA tokenization as converting ownership or income rights into tokens for issuance and trading, and warn that such activities in China “shall be prohibited” unless explicitly approved on designated financial infrastructure. Offshore entities are also barred from “illegally providing…RWA tokenization‑related services” to onshore users. Enforcement, mining and offshore routes The notice hardens the multi‑agency framework first laid out in 2021’s Yinfa No. 237, which labeled key crypto activities as illegal and banned offshore exchanges from serving mainland clients. Financial institutions and payment firms are now forbidden from opening accounts, transferring funds, settling, custoding, or insuring any virtual‑asset‑linked product. Internet platforms may not provide “online business venues, commercial displays, marketing, traffic‑buying or paid promotion” for crypto or RWA services and must help shut down relevant websites, apps and public accounts. Beijing also renews its campaign against mining, ordering provinces to “comprehensively identify and shut down existing virtual currency ‘mining’ projects” and “strictly prohibit” any new capacity. On offshore structuring, regulators apply a “same business, same risk, same rules” principle: domestic entities and the overseas vehicles they control may not issue virtual currencies or conduct RWA‑style securitizations based on onshore assets without prior approval, filing or registration. Market context and price action The clampdown lands in a market where global traders continue to treat digital assets as high‑beta macro risk. Bitcoin (BTC) trades near $66,005, down roughly 7.9% over the last 24 hours. Ethereum (ETH) changes hands around $1,890, lower by about 11.6% on the day. Solana (SOL) sits near $77.8, off approximately 15.4% in 24‑hour terms. The notice takes immediate effect and simultaneously repeals the landmark 2021 circular on virtual‑currency speculation, signaling that China’s stance has shifted from episodic crackdowns to a durable, high‑pressure regime designed to “maintain economic and financial order and social stability” and leave no grey zone for crypto or RWA experimentation.
