China Tightens Crypto Ban Expanding Crackdown On Stablecoins And Tokenization

TLDR

• China strengthens crypto regulations, restricting stablecoins and tokenization of real-world assets.
• New regulations ban stablecoins linked to the yuan and require strict approvals for tokenization.
• China tightens its grip on overseas crypto activities, including foreign-issued stablecoins.
• Financial and tech partners of Chinese firms must now meet stricter compliance standards.

In a recent move, Chinese regulators have broadened their crackdown on cryptocurrency activities, extending restrictions to stablecoins and tokenization. The new set of rules, announced by multiple national organizations including the People’s Bank of China (PBOC) and the China Securities Regulatory Commission (CSRC), reaffirms China’s firm stance on controlling virtual currencies.

This decision aims to address the growing concerns over the rise of speculative activities related to virtual currencies and the tokenization of real-world assets, which regulators claim pose challenges to financial stability.

The new rules, outlined in a notice issued on February 6, 2026, reaffirm China’s 2021 ban on cryptocurrency trading. The notice also extends these restrictions to any crypto-related activities, including trading and issuance of digital currencies such as Bitcoin, Ether, and popular stablecoins like Tether (USDT), both within China and across its borders.

China’s Stricter Approach to Stablecoins

One of the primary targets of this expanded crackdown is stablecoins, which are cryptocurrencies pegged to fiat currencies. Stablecoins, according to Chinese authorities, perform similar functions to sovereign currencies, which could undermine the country’s monetary system.

The notice stresses that no entity, whether domestic or foreign, is allowed to issue a stablecoin linked to the Chinese yuan (renminbi) outside of China without prior government approval. This regulation aims to prevent any entity from bypassing China’s strict control over its financial system.

The crackdown also affects overseas entities. Chinese companies that previously issued or traded in stablecoins abroad must now obtain regulatory approval or face penalties. This move highlights China’s growing concern over the rise of decentralized financial systems, which operate outside the direct control of national authorities.

Tightening Control on Tokenization

Another key focus of the new regulations is the tokenization of real-world assets. Tokenization refers to the process of converting ownership rights to physical or financial assets, such as real estate or stocks, into digital tokens. This emerging trend has gained significant traction in recent years, with many companies aiming to use blockchain technology to enhance asset liquidity and transferability.

Chinese authorities have stated that any entity, whether foreign or domestic, wishing to tokenize assets must now meet stricter compliance standards. These firms must gain regulatory approval or file the necessary paperwork with government bodies before proceeding. The notice also emphasized the importance of adhering to enhanced compliance standards for financial and tech partners who are involved in such activities.

Scrutiny of Overseas Crypto Activities

The new regulations also increase scrutiny of overseas cryptocurrency operations involving Chinese entities. Firms that conduct crypto or tokenization activities outside of China now face heightened oversight. This step indicates China’s intent to monitor and control crypto-related activities beyond its borders, ensuring that Chinese businesses are in full compliance with domestic laws.

Authorities have made it clear that all crypto-related activities, whether domestic or international, are subject to the country’s strict regulatory framework. This expansion of controls is part of China’s ongoing effort to curb speculative investment in virtual currencies, which regulators argue can destabilize the economy.

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