Several of China’s largest financial industry associations have reportedly signaled that the country’s regulatory authorities may clamp down on Real-World Asset (RWA) tokenization.
According to a notice shared by Wu Blockchain on Monday, the Asset Management Association of China, National Internet Finance Association of China, China Banking Association, Securities Association of China, China Futures Association, China Association for Public Companies, and China Payment Clearing Association will no longer consider RWA as a “new technology” is subject to regulatory clarification, but rather as a “risky” business model.
The association listed RWA, stablecoins, “aircoins,” a term for tokens that have no real value, and mining as illegal cryptocurrency-related activities.
“Real-world asset tokenization involves financing and trading activities conducted through the issuance of tokens or other rights or debt certificates with token-like characteristics,” he said association, according to the translation provided by Wu Blockchain. “It carries multiple risks, including the risks of fake assets, operational failure, and speculative hype. Currently, no real-world asset tokenization activities have been approved by China’s financial regulatory authorities.”
The policy change by industry associations effectively defines involvement in RWA as “financing and trading activity” prohibited under Chinese law, putting them at risk of a regulatory crackdown. In October, the People’s Bank of China and another regulatory body reportedly dissuaded the country’s tech giants from pursuing their stablecoin plans, signaling Beijing’s concerns.
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“(R)regulators’ message this time is unequivocal: this is not a technology issue, nor a mechanism issue — the real-world financial risks far outweigh any technological benefits,” wrote Wu Blockchain. “The document does not mention ‘technical pilots’, ‘layered regulation’ or ‘prudential development.’ This clearly shows that the regulatory objective is not to optimize RWA – but to exclude it from the legal landscape altogether.”
Coinbase CEO warns US could lose to China
With the US government’s passage of the GENIUS Act in July, regulators moved to establish a federal framework for stablecoin payments in the country. However, banks’ pressure on lawmakers to address stablecoin rewards reportedly occurred in the middle of the bill’s implementation.
Coinbase Chief Policy Officer Faryar Shirzad said in December that the debate over enforcement could weaken the US position as China races to use its digital yuan for global payments. Commercial banks in China are allowed to pay interest on balances held in digital yuan wallets starting Thursday.
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