China moved to tighten its long-running crackdown on digital assets, extending enforcement beyond trading and mining to target the grey areas that have allowed Chinese firms to operate Web3 businesses offshore.
Regulators have warned that renewed speculation poses risks to financial stability and monetary sovereignty.
In a joint notice issued on Friday, the People’s Bank of China and seven other government bodies reiterated that cryptocurrencies have no legal status equivalent to fiat money and that related business activities in the mainland constitute illegal financial activity.
The move builds on Beijing’s sweeping 2021 ban on cryptocurrency trading and mining but shifts the focus to cross-border structures that have enabled Chinese-linked projects to persist through offshore entities, overseas issuance and technical service arrangements.
Under the latest rules, onshore firms may not issue cryptocurrencies overseas without authorization from relevant authorities, according to Bloomberg. Regulators also barred the offshore issuance of yuan-linked stablecoins without approval, citing risks to China’s monetary sovereignty.
Authorities also took aim at real-world asset tokenization, warning that tokenizing assets within China, or providing the supporting information technology and intermediary services, may constitute illegal securities issuance or unauthorized fundraising. Such activities remain prohibited unless conducted through a narrowly defined set of state-approved financial infrastructures.
"Speculation involving cryptocurrencies and real-world asset tokenization has occurred from time to time amid multiple factors, presenting new challenges for risk prevention and control," regulators said in the notice, adding that stronger measures are needed to safeguard national security and social stability.
The document also closes off offshore workarounds, barring overseas entities from illegally providing crypto-related services to mainland clients in any form, a provision aimed at cutting off the technical, operational and personnel channels that have allowed digital asset activity to survive despite domestic bans.
The stance further sharpens the policy divide within Greater China. While the mainland continues to treat token-based finance as an illegal financial activity, Hong Kong has moved in the opposite direction, building regulated frameworks for licensed crypto trading, stablecoins and tokenized products under its financial services regime.
China’s strict stance on cryptocurrencies on the mainland has long been justified on the grounds of financial stability, capital controls and currency sovereignty, with regulators treating private digital currencies as a systemic risk rather than a financial innovation.
Hong Kong, by contrast, has been positioned as a pressure valve rather than an exception. Operating under a separate regulatory framework, the city shifted from a period of policy observation to a licensing-driven regime since its Stablecoins Ordinance took effect in August 2025, a move analysts describe as the creation of a deliberate regulatory sandbox, allowing authorities to study stablecoins and tokenized payments in a controlled environment without loosening restrictions on the mainland.
