China’s central bank and financial regulators have issued a sweeping ban on all cryptocurrency activities, reinforcing the country’s long-standing opposition to digital assets.
The notice, issued on February 6, by the People’s Bank of China (PBOC) along with multiple government agencies, confirms that activities such as cryptocurrency trading, issuance, mining, and unapproved RMB-backed stablecoins are strictly prohibited.
Real-world asset (RWA) tokenization is also largely banned unless conducted under specific financial infrastructure with government approval.
According to the notice, virtual currencies such as Bitcoin, Ethereum, and Tether are not considered legal money. Any form of trading or token issuance of these currencies is considered illegal.
Foreign businesses are also prohibited from providing cryptocurrency services to residents of China. Stablecoins pegged to the Renminbi cannot be issued outside China without the approval of the regulators.
Provincial Governments and Departmental Coordination
According to the rule, all provincial governments are required to implement the rule, and the financial management departments are supposed to lead the coordination. The local branches of the PBOC, public security, market regulation, and cyberspace administrations are supposed to establish monitoring systems for illegal activities of crypto and RWA.
The authorities need to increase their level of monitoring, both online and offline, as well as share risk information among the various departments.
Banks and other financial institutions, including payment service providers, are prohibited from offering any services related to cryptocurrencies or unauthorized real-world asset (RWA) businesses.
Internet companies are also banned from operating online marketplaces, advertising, and promotional services for such marketplaces.
The National Development and Reform Commission (NDRC) still regulates digital currency mining. Existing mining operations are subject to a rigorous screening process, and new mining operations are prohibited. Manufacturers of mining equipment are banned from selling their products within the country.
Strict Penalties for Crypto and RWA Violations
Breaking the new regulations will result in harsh punishment. Those who engage in illegal crypto and real-world asset (RWA) activities may be fined, sued, or prosecuted. Institutions that assist foreign businesses in providing their services to Chinese citizens will also be punished.
Industry associations must enhance self-regulation by assisting their members in abiding by the law and reporting any suspicious activity. Public education campaigns will raise awareness about the dangers of cryptocurrencies and RWA tokenization.
Read More: Trump Threatens 100% Tariffs on Canada Over China Trade Talks
