February 10, 2026
By Anjali Kochhar
China has intensified its long running crackdown on cryptocurrencies by banning the onshore tokenisation of real world assets and tightening oversight of offshore digital asset activities, signalling a further narrowing of space for blockchain based financial innovation outside state control.
In a joint notice issued by the People’s Bank of China and seven other government agencies, regulators said that real world asset tokenisation and related intermediary services would be considered illegal unless explicitly approved. The document was co signed by authorities including the China Securities Regulatory Commission and the State Administration of Foreign Exchange.
Real world asset tokenisation involves converting ownership or income rights linked to traditional assets such as bonds, equities, real estate or commodities into digital tokens recorded on a blockchain. While the technology has gained global traction as a way to improve efficiency and liquidity in financial markets, Chinese regulators warned that it carries risks related to illegal fundraising, fraud and financial instability.
The new rules prohibit domestic institutions from engaging in token issuance or providing technical services for such activities within mainland China. They also extend regulatory reach to offshore operations, barring Chinese companies and their overseas subsidiaries from conducting tokenisation or issuing virtual currencies abroad without prior regulatory approval.
In a further tightening of controls, the notice bans the issuance of yuan pegged stablecoins offshore without authorisation, closing a route that some market participants had viewed as a potential workaround to mainland restrictions. Regulators said such activities could undermine monetary sovereignty and disrupt cross border capital flows.
Offshore entities linked to Chinese firms that are involved in digital asset related services will now face enhanced compliance obligations. These include stricter anti money laundering controls, tighter client suitability checks and mandatory reporting to domestic regulators. Companies found to be in violation could face penalties or be ordered to cease operations.
China has maintained one of the world’s toughest stances on cryptocurrencies, having banned crypto trading, exchange services and mining in recent years. At the same time, authorities have continued to promote state backed alternatives, including the digital yuan, which is being gradually rolled out across multiple cities.
Market reaction to the latest move has been cautious. Analysts say the clarification removes lingering regulatory grey areas but further limits opportunities for private sector innovation in the digital asset space. Some industry participants warn that the tightening could push talent and capital overseas, while others argue that clearer rules may eventually allow for tightly regulated institutional uses of blockchain technology.
For Beijing, the priority remains safeguarding financial stability and maintaining firm control over the country’s monetary system as digital finance continues to evolve.
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.
