The People’s Bank of China, in conjunction with eight major departments, issued new regulations that for the first time separate RWA from virtual currencies and establish a filing-based regulatory framework. This marks China’s transition from “comprehensive crackdown” on crypto assets to “classified regulation,” providing a compliant pathway for domestic assets to go overseas via tokenization. This article is authored by菠菜菠菜 and organized, translated, and written by Foresight News.
(Background: China’s central bank and seven other departments reaffirm: fully blocking offshore RMB stablecoins, virtual currencies are illegal financial activities)
(Additional context: How will interest-bearing digital RMB impact digital finance in Hong Kong?)
Table of Contents
- Key Point 1: Attitude towards virtual currencies remains unchanged, but wording is more precise
- Key Point 2: The definition of RWA is written into departmental-level documents for the first time
- Key Point 3: Formal regulatory framework for domestic asset tokenization offshore
- Key Point 4: CSM filing system, concrete pathway for asset-backed securities tokens
- Key Point 5: The role of financial institutions is strictly defined
- How to interpret the overall signals of these two documents?
February 6, 2026, a day worth remembering. On this day, the People’s Bank of China, together with the National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public Security, State Administration for Market Regulation, China Banking and Insurance Regulatory Commission, China Securities Regulatory Commission, State Administration of Foreign Exchange, issued the “Notice on Further Preventing and Managing Risks Related to Virtual Currencies” (Yinfa [2026] No. 42).
At the same time, a more practical annex, “Regulatory Guidelines on Offshore Issuance of Asset-Backed Securities Tokens Based on Domestic Assets,” was also released.
This is not just a simple “ban.” If you still think “China is banning crypto again,” then you are completely misreading this document.
Let me break down these two documents in plain language.
In 2021, the eight departments issued a similar document—Yinfa [2021] No. 237, commonly known as the “924 Notice.” That document set the tone for China’s “comprehensive containment” of virtual currencies. Five years later, the final point of No. 42 explicitly states: “The People’s Bank of China and ten other departments’ ‘Notice on Further Preventing and Managing Risks of Virtual Currency Trading and Speculation’ (Yinfa [2021] No. 237) is repealed.”
Replacing the old with the new indicates this is not just a patch but a systemic overhaul of rules. So, what is the biggest difference between the new and old documents?
One word: RWA.
The 2021 924 Notice was entirely centered on virtual currencies, where the concept of “RWA” was almost nonexistent in the domestic regulatory context at that time. But No. 42 devotes extensive space to defining and regulating “Real-World Asset Tokenization” (RWA), which is a huge signal—regulators officially recognize RWA as a legitimate business form and are setting rules for it, rather than outright banning.
Key Point 1: Attitude towards virtual currencies remains unchanged, but wording is more precise
The first clause of the first article of No. 42 clearly states: “Virtual currencies do not have the same legal status as fiat money.” Bitcoin, Ethereum, USDT, etc., are explicitly named and characterized as “not having legal tender status and should not and cannot be used as currency in market circulation.”
The wording here closely follows the 924 Notice: activities such as domestic exchanges between fiat and virtual currencies, virtual currency trading, providing intermediary and pricing services, token issuance for fundraising, etc., are “strictly prohibited and must be lawfully shut down.” Similarly, foreign entities providing virtual currency services to domestic users are also banned.
However, an important new statement appears: “Without the approval of relevant departments in accordance with laws and regulations, no domestic or foreign entities or individuals shall issue stablecoins pegged to RMB outside China.” Note that the document uses “without approval,” not “absolutely prohibited.” What does this imply? Theoretically, if “approved by relevant departments in accordance with laws and regulations,” RMB-pegged stablecoins could exist within a compliant pathway. The opening is small but real.
For virtual currency investors, frankly, this is nothing new. The bans and crackdowns continue as before. Mining regulation persists, advertising bans remain, and even company names and business scopes are not allowed to include words like “virtual currency,” “cryptocurrency,” or “stablecoin.”
Key Point 2: The definition of RWA is written into departmental-level documents for the first time
This is the most noteworthy part of No. 42. The second clause of the first article provides a clear official definition:
“Real-World Asset Tokenization refers to activities that use cryptographic technology and distributed ledger or similar technology to convert ownership rights, income rights, etc., of assets into tokens (securities) or other rights and bonds with token (security) characteristics, and conduct issuance and trading.”
This definition has several layers worth unpacking. First, it locks the technical means of RWA to “cryptographic technology and distributed ledger or similar technology”—meaning blockchain or similar tech is a necessary condition for RWA. Second, the objects of tokenization are “ownership rights, income rights, etc.,” covering a broad range—from real estate to receivables, bonds, and fund shares, all theoretically within scope. Finally, both “issuance and trading” are included under regulation.
But the real key is the following sentence:
“Except for activities conducted with the approval of the competent business authorities and relying on specific financial infrastructure.”
In plain language: RWA within China is not entirely forbidden, but you must obtain approval and operate on regulated financial infrastructure. The phrase “specific financial infrastructure” is intriguing. What qualifies as “specific financial infrastructure”? The document does not specify explicitly, but based on current Chinese practices, candidates include the Shanghai Data Exchange, Beijing Big Data Exchange, Shenzhen Data Exchange, various regional financial asset exchanges, and the digital RMB infrastructure led by the People’s Bank of China.
In other words, the logic of No. 42 is not “ban RWA,” but “RWA must operate within my controlled environment.”
Key Point 3: Formal regulatory framework for domestic asset tokenization offshore
Chapter 4 of No. 42, “Strict regulation of domestic entities engaging in offshore activities,” is the most groundbreaking part of the document. It does not say “ban offshore activities,” but rather “offshore activities are permitted but must follow rules.”
Article 14 distinguishes several scenarios: domestic entities issuing RWA as foreign debt must be managed by the NDRC and SAFE; engaging in asset securitization or equity-like RWA based on domestic rights offshore falls under CSRC; other forms of RWA are also managed by CSRC jointly with relevant departments. The core principle is “same business, same risk, same rules”—whether you are issuing in Hong Kong or Singapore, as long as the underlying assets are within China, Chinese regulation applies.
What does this mean? The biggest obstacle for domestic assets tokenized and exported offshore has not been technology or market but regulatory ambiguity. Many projects want to do it but dare not—due to lack of clear rules, they risk legality or illegality. No. 42 finally clarifies: you can do it, but you need approval or filing.
The accompanying “Regulatory Guidelines on Offshore Issuance of Asset-Backed Securities Tokens Based on Domestic Assets” (hereafter “Guidelines”) makes the “how-to” more concrete.
Key Point 4: CSRC filing system, concrete pathway for asset-backed securities tokens
The “Guidelines” is the most practical document this time. It sets filing rules specifically for “issuing asset-backed securities tokens offshore based on domestic assets.”
The core process: the domestic controlling entity of the underlying assets files with the CSRC, submitting a filing report, complete offshore issuance documents, and detailed information about the domestic entity, underlying assets, and token issuance plan. If the materials are complete and compliant, the CSRC will process and publish the filing; if not, it will reject.
Note that this is a “filing” system, not an approval system. Although the CSRC can “seek opinions from relevant authorities and industry regulators as appropriate,” the overall design is a filing system, which is more lenient than approval. This indicates that regulators are cautiously open to domestic asset tokenization for offshore issuance—not giving a green light but not closing the door either.
The Guidelines also specify a clear negative list: assets prohibited by law, assets threatening national security, assets with criminal records of the controllers, assets under investigation, assets with major ownership disputes, and assets on the domestic asset securitization negative list are all disallowed.
These restrictions align closely with existing regulations on domestic asset securitization and overseas listings, showing that regulators are integrating RWA tokenization into the existing securities regulatory framework rather than creating a new one.
Key Point 5: The role of financial institutions is strictly defined
Clause 6 of No. 42 clearly states: for virtual currency-related activities, financial institutions are strictly prohibited from providing account opening, fund transfer, clearing, and settlement services; but for RWA activities, the restriction is “without approval”—meaning, if the RWA business is compliant and filed, financial institutions are permitted to provide custody, clearing, settlement, etc.
This is significant for the industry. For RWA projects to grow, participation of traditional financial institutions—custodian banks, clearing agencies, payment channels—is essential. No. 42 removes the “negative label” of virtual currencies from compliant RWA projects, clearing policy obstacles for financial institutions’ involvement.
Article 15 further stipulates that domestic financial institutions’ overseas subsidiaries and branches providing RWA services abroad must do so “prudently and lawfully,” equipped with professional personnel and systems, implementing KYC, suitability management, AML, and other requirements, and integrating into the domestic financial institution’s compliance and risk management system. Essentially, this instructs Chinese-controlled overseas branches: you can do this business, but it must be managed centrally, avoiding “regulatory arbitrage.”
How to interpret the overall signals of these two documents?
Looking at No. 42 and the “Guidelines” together, a very clear regulatory logic emerges:
First, virtual currencies and RWA are explicitly separated. The crackdown on virtual currencies continues unchanged since 2017. But RWA is no longer lumped into “virtual currency-related activities”; instead, it is treated as a legitimate financial business form that can exist within a regulated framework.
Second, domestic RWA must operate under a “licensed operation” model. Within China, RWA must be conducted on “specific financial infrastructure” approved by regulators; without licenses or approvals, it is considered illegal financial activity. This aligns with China’s longstanding regulatory approach—finance as a licensed industry.
Third, domestic asset offshore tokenization adopts a filing system. This is the biggest new information. It provides a compliant pathway for high-quality domestic assets to enter global capital markets via RWA. The CSRC, as the main regulator, handles filings rather than approvals, with relatively moderate thresholds.
Fourth, participation of compliant financial institutions is explicitly permitted. This provides a regulatory foundation for building the ecosystem. Without banks and clearing institutions, RWA remains a hollow concept.
From a broader perspective, the issuance of No. 42 and the Guidelines marks a shift in China’s regulatory approach to crypto assets from “one-size-fits-all suppression” to “classified regulation.” Virtual currencies should continue to be strictly suppressed, but RWA—especially those backed by real assets, with compliant structures, and with regulatory filings—are being separated from enforcement targets and integrated into the formal financial regulatory system.
This is not China’s way of embracing crypto, but rather its way of embracing tokenization on its own terms.
