China has significantly widened its long standing crackdown on cryptocurrencies, extending restrictions to stablecoins and tokenized assets in a move that reinforces the country’s strict stance on digital finance. Regulators warned that recent growth in speculative activity linked to virtual currencies and tokenization has introduced new risks, prompting authorities to tighten controls beyond earlier bans on mining and trading.
In a joint notice issued by financial regulators, including the People’s Bank of China and the China Securities Regulatory Commission, officials said stablecoins and tokenized assets could undermine monetary control and complicate financial risk management. The notice highlighted concerns that stablecoins can replicate key functions of sovereign money, potentially weakening the central bank’s ability to oversee currency issuance and payment systems.
Under the new rules, any entity is prohibited from issuing a yuan linked stablecoin without explicit government authorization. This applies not only to domestic companies but also to foreign firms and individuals offering related services within China. Regulators also barred Chinese organizations from issuing digital currencies overseas unless they receive prior approval, signaling a more assertive effort to close regulatory loopholes that could allow crypto activity to migrate offshore.
The restrictions extend to asset tokenization as well. Chinese companies seeking to tokenize assets abroad must now meet stricter compliance requirements, and their financial and technology partners will face heightened regulatory scrutiny. Authorities emphasized that tokenization of real world assets, while often framed as innovation, can become a channel for speculation and capital flow risks if left unchecked.
This latest action builds on China’s comprehensive crypto ban introduced in 2021, which effectively outlawed mining and most crypto related business activities. Since then, regulators have maintained a cautious posture toward digital assets, even as global interest in stablecoins and tokenized finance has accelerated. Reports from last year indicated that major Chinese technology firms were instructed to pause stablecoin initiatives, suggesting that the groundwork for the current expansion was laid well in advance.
China’s approach contrasts sharply with debates unfolding in other major economies. In the United States, lawmakers remain divided over stablecoin regulation, particularly around whether issuers should be allowed to offer yield. That disagreement has slowed progress on comprehensive legislation, leaving the market in regulatory limbo. Analysts warn that prolonged uncertainty could shape where innovation and capital ultimately settle.
In Europe, policymakers are moving in a different direction altogether, promoting initiatives such as the digital euro as a way to safeguard payment sovereignty and reduce dependence on foreign payment networks. European central bankers have argued that state backed digital currencies are essential infrastructure in an increasingly digital economy.
China’s latest move underscores its preference for centralized control over digital money. By extending its ban to stablecoins and tokenized assets, Beijing is drawing a clear line between state sanctioned digital finance and privately issued crypto instruments. The policy signals that, despite global experimentation with stablecoins, China intends to keep monetary authority firmly in government hands.
For global crypto markets, the decision reinforces a familiar reality. China remains closed to most forms of decentralized digital assets, even as other regions explore ways to integrate them into regulated financial systems. The divergence highlights how regulation, rather than technology alone, is shaping the future geography of crypto innovation.
