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China has moved to shut down Bitcoin-linked real-world-asset (RWA) tokenization, declaring the practice illegal and widening enforcement to service providers that support it. The move covers issuance, trading and financing of tokens backed by off-chain assets, and signals extra scrutiny of mainland links to projects routed through Hong Kong. Officials say the aim is to curb fraud, speculation, and unlicensed fundraising tied to crypto activity.
Seven national industry associations warned members that participating in RWA tokenization may constitute “illegal financial activities.” In their notice, the groups said no tokenization projects have received regulatory approval. Ledger Insights reported the wording and emphasized that the guidance equates tokenization with virtual-currency business. The associations publish warning, which broadens risk to platforms, law firms, and marketing tied to mainland users.
Local media added that the bodies operate under oversight from the People’s Bank of China and the securities regulator. SCMP noted the alert as the first coordinated message that explicitly targets RWA services, stating authorities had not approved any such activity. The paper said regulators also faulted stablecoins for KYC/AML gaps. SCMP’s report detail notice and the supervisory context.
The warning follows a late-November meeting where the central bank vowed to intensify its crypto crackdown and singled out stablecoins. Reuters said the PBOC reiterated that virtual-currency activity is illegal and promised tougher action to protect financial stability. The central bank’s stance underline crackdown, setting the tone for broader enforcement that now clearly includes RWA tokenization.
For real-estate tokenization, the message is direct: structures that link mainland assets or investors to on-chain property tokens face legal risk, even if issuance occurs offshore. Service chains—onboarding, escrow, marketing, legal, or payments—are now in scope. Market participants expect China-related projects to rely on traditional financing or state-approved pilots, while Hong Kong’s regulated routes will likely keep a strict firewall from mainland users.
“Regulators have drawn a concrete red line on what used to be a vague borderline,” said Liu Honglin, founder of Man Kun Law Firm, after the PBOC’s meeting shaped the new stance. Lawyers say the combination of the central bank’s guidance and the associations’ notice removes ambiguity: Bitcoin-denominated or Bitcoin-settled RWA deals are now treated as illegal business on the mainland.
