Key Insights:
- China prohibits the issuance of unverified yuan stablecoins and the nationwide tokenization of assets.
- Regulations apply to both offshore and onshore renminbi markets.
- The policy of the digital yuan is developing, with a limitation on private issuance.
China’s stablecoin ban took a new and broader form on Friday, with the country’s central bank and seven national regulatory agencies jointly prohibiting the issuance of unapproved renminbi-pegged stablecoins and tokenized real-world assets.
Scope of the China Stablecoin Ban
The coordinated statement clarified that the restrictions apply to both domestic and foreign entities and extend across onshore and offshore versions of China’s currency, reinforcing the government’s long-standing separation between digital assets and the formal financial system while advancing the rollout of the state-issued digital yuan.
The People’s Bank of China published the joint announcement alongside agencies including the Ministry of Industry and Information Technology and the China Securities Regulatory Commission. Regulators stated that no individual or organization, whether based in China or abroad, may issue renminbi-linked stablecoins without explicit approval from relevant authorities.
According to the statement, the China stablecoin ban applies equally to stablecoins pegged to the onshore yuan (CNY) and its offshore counterpart (CNH).
Winston Ma, an adjunct professor at New York University Law School and former managing director of China Investment Corporation, stated that the prohibition covers all renminbi-related markets, regardless of where the issuance takes place.
Ma explained that CNH was created to allow flexibility in international foreign exchange markets while maintaining domestic capital controls.
He added that the updated enforcement confirms regulators’ intent to prevent renminbi-linked crypto instruments from operating outside the formal regulatory perimeter. The statement framed the move as part of an ongoing, multi-year regulatory framework rather than a sudden policy shift.
Real-World Asset Tokenization Limitations
In addition to stablecoins, regulators outlined an expanded regulatory framework for the real-world tokenization of assets. The notice described tokenized RWAs in a general way, such as digital tokens that signify possession or earnings privileges based on a tangible or financial asset.
The authorities claimed that these activities are usually illegal, particularly when carried out in unapproved financial infrastructure or under pilot programs approved by the regulator.
Consequently, the China stablecoin ban now directly intersects with tokenization activity, indicating regulators’ attempts to ensure that the digital asset structure does not re-enter the financial system under other categories.
The provincial governments were mandated to identify and close any unauthorized projects, and the market regulators were ordered to decline company registrations that mention cryptocurrencies, stablecoins, or tokenization in their business operations.
Measures of Enforcement and Compliance
The collaborative statement outlined enforcement measures across the cross-cutting government levels. Internet services will be obliged to delete promotional content, close applications, and block traffic associated with prohibited activities.
Moreover, Government security agencies and financial control will prioritize fraud, illegal fundraising, and money laundering related to digital asset operations. Existing regulations have rendered mining activities illegal, and new inspections have been directed at the hardware vendors and the local operators.
Local companies engaged in overseas tokenization projects also need to adhere to foreign debt and capital control standards, which must be approved before the companies’ activities are carried out in other countries. The regulators noted that these measures aim to ensure that speculative behavior does not recur through offshore mechanisms.
Policy developments of the Digital Yuan
In January 2026, the PBOC allowed commercial banks to hold interest balances in digital yuan wallets, a measure that should make the use of the central bank digital currency more attractive.
Lu Lei, a deputy governor at the PBOC, stated that the adjustment would move the e-CNY beyond its original role as a digital version of cash and integrate it into banks’ asset-and-liability operations.
In August 2025, earlier reports indicated that China was likely to adopt yuan-pegged stablecoins, a significant policy change. Additionally, in 2023, Japan introduced a legal framework for the issuance of stablecoins, and Hong Kong plans to start licensing stablecoin issuers this year.
Globally, stablecoin usage has continued to expand. Transaction value reached $33 trillion in 2025, a 72% increase from the prior year, according to data compiled by Bloomberg and Artemis Analytics. USDC had a transaction volume of $18.3 trillion, and Tether had $13.3 trillion, and still retains the largest market capitalization of $187 billion.
