China Reiterates Crypto Ban While Cracking Down on Tokenized Assets and Yuan Stablecoins

Like clockwork, China FUD is back just as Bitcoin slips into bear-market territory. Beijing has widened the scope of its cryptocurrency ban, explicitly targeting the tokenization of real-world assets and unauthorized stablecoins linked to its currency.

China just reminded the global market that its door to cryptocurrency remains firmly shut. In a coordinated move involving the central bank and law enforcement, Beijing has expanded its longstanding crypto prohibition to specifically target two growing sectors: Real-World Asset (RWA) tokenization and offshore stablecoins pegged to the Chinese yuan.

JUST IN: China has issued a joint regulatory notice in 2026 prohibiting the issuance of RMB-linked stablecoins and RWA tokenization without prior approval. pic.twitter.com/qXvPSxa8pg

— David Lavi Mattan (@digitbtc) February 6, 2026

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While the country has technically banned crypto trading since 2021, this new directive closes specific loopholes that investors have used to trade in digital assets abroad. For beginners, this serves as a reminder that regulatory risks can vary wildly depending on where you and the projects you invest in are located.

While the rest of the world sees RWA as a major opportunity to make finance more efficient, Chinese regulators see it as a threat to financial stability.

The ban also targets yuan-linked stablecoins. Beijing is fiercely protective of its national currency and views unauthorized digital versions of the yuan as a direct challenge to its monetary sovereignty.

‘Same Business, Same Risk, Same Rules’

On Friday, the People’s Bank of China (PBOC), along with the Ministry of Public Security and other top agencies, released a joint notice declaring these activities illegal. The message was clear: speculative activity tied to virtual currencies disrupts the financial order.

The directive applies a strict principle of “same business, same risk, same rules.” This means that even if a company operates “offshore” (outside of mainland China), it cannot issue tokens representing domestic Chinese assets or the yuan without explicit government approval.

The People’s Bank of China, #China’s central bank, and seven other government agencies on Friday jointly issued a notice on preventing cryptocurrency risks. The notice reiterated that cryptocurrencies do not have the legal status of currency or money, conducting related business… pic.twitter.com/hIBk8BRET4

— Global Times (@globaltimesnews) February 6, 2026

According to The Block, the notice states:

“Without approval… no entity or individual, inside or outside China, may issue offshore stablecoins pegged to the renminbi.”

This effectively blocks foreign entities from creating crypto products that track the Chinese economy for Chinese users. It is a significant escalation aimed at preventing capital flight and maintaining tight control over the nation’s financial system.

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What This Means For the Crypto Market

China’s crackdown highlights a growing divide in global regulation. While Beijing doubles down on prohibition, its neighbor is taking the opposite approach. Hong Kong is actively building a regulated hub for digital assets, with stablecoin licenses expected to roll out soon, creating a unique “one country, two systems” dynamic for crypto.

Interesting how China bans crypto at home, yet is still willing to invest in RWAs overseas.

Not a rejection of RWAs, more about control.

They don’t want open crypto markets domestically, but they’re fine getting exposure through regulated, offshore channels.@Tokenfi – RWA pic.twitter.com/6aopImx8pP

— NoTGork (@G_O_R_K) February 6, 2026

This contrast extends globally. In the United States, traditional finance giants are embracing the technology, as evidenced by Fidelity’s recent stablecoin launch. However, regulatory clarity remains a struggle in the West, as seen with the stalled Lummis-Gillibrand Stablecoin Act.

Meanwhile, other emerging markets are experimenting rather than banning. For instance, projects like the South African ZARu stablecoin show how other nations are integrating local currencies on-chain.

For you as an investor, this news is a reminder that while the technology is global, the rules are local. Projects heavily reliant on Chinese liquidity or assets may face new hurdles, while those operating in regulated jurisdictions such as Hong Kong or Europe may gain greater legitimacy.

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