February 12, 2026
By Anjali Kochhar
China has moved to explicitly ban the onshore tokenisation of real world assets, a process that converts property rights such as real estate, commodities, art or bonds into digital tokens. The sweeping regulatory overhaul is designed to tighten financial supervision and guard against fraud and uncontrolled cross border capital flows.
The policy, issued jointly by the People’s Bank of China and seven other regulatory bodies, marks one of the most significant clarifications of China’s stance on emerging blockchain based financial products. Under the new rules, real world asset tokenisation is explicitly prohibited onshore, closing a regulatory gap that had allowed many speculative or unregulated products to proliferate.
Tokenisation refers to the process of using cryptographic and distributed ledger technologies to convert ownership and income rights of traditional assets into digital tokens that can be traded on blockchain platforms. Supporters argue that tokenisation can improve liquidity and broaden access to investment opportunities, but Chinese regulators have grown increasingly wary of its misuse.
Liu Xiaochun, vice president of the China Academy of Financial Research at Shanghai Jiao Tong University, said many of the real world asset products circulating within the mainland were little more than scams in disguise. Others were being used to move capital offshore in ways that circumvented regulatory controls. He noted that the growing number of fraudulent schemes and the risk of capital outflows made a comprehensive ban necessary.
The notice also tightens scrutiny of offshore activities by domestic entities, including prohibiting onshore companies and their controlled offshore affiliates from issuing virtual currencies overseas without explicit approval. Stablecoins pegged to the yuan are included in the ban unless regulators grant a licence, reflecting Beijing’s determination to safeguard monetary sovereignty.
Despite the restrictive stance on the mainland, officials left limited room for regulated digital finance innovation outside China, particularly in markets such as Hong Kong. Analysts say that by enforcing strict prohibition onshore and strict governance offshore, China is attempting to balance financial risk control with the possibility of compliant and regulated experimentation.
Industry observers believe the move aligns with broader global regulatory trends as authorities worldwide step up oversight of digital assets. While the ban is likely to slow domestic experimentation, it underscores Beijing’s prioritisation of financial security and capital control over rapid financial innovation.
About the author
Anjali Kochhar covers cryptocurrency and blockchain stories in India as well as globally. Having been in the field of media and journalism for over four years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.
