Several of China's largest financial industry associations have issued a joint notice formally classifying Real-World Asset (RWA) tokenization as an illegal financial activity. The notice, shared by Wu Blockchain, is co-signed by the Asset Management Association of China, National Internet Finance Association of China, China Banking Association, Securities Association of China, China Futures Association, China Association for Public Companies, and the China Payment Clearing Association.
The associations stated that RWA tokenization "involves financing and trading activities carried out through the issuance of tokens or other rights or debt certificates with token-like characteristics" and carries risks of "fraudulent assets, operational failure, and speculative hype." Crucially, the document clarifies that no RWA activities have been approved by China's financial regulators, meaning all related services and platforms currently lack any legal basis for operation within the country.
The policy shift redefines involvement with RWAs as prohibited "financing and trading activity" under Chinese law, subjecting it to the Securities Law and regulations banning illegal financial business. The notice explicitly links RWAs with other prohibited activities like stablecoins, "air coins" (worthless tokens), and mining, warning that criminals use these banners to conduct illegal fundraising and fraud.
The regulatory stance is described as unequivocal. According to analysis from Wu Blockchain, regulators view this as a financial risk issue, not a technological one, with the goal being to "exclude it entirely from the legal landscape" rather than optimize it through pilots or tiered regulation. The notice also warns that domestic staff who knowingly support overseas crypto or RWA service providers will be held legally accountable, effectively terminating the entire Web3 service chain for RWAs within mainland China.
This development follows earlier signals from Beijing, including reports in October that the People's Bank of China dissuaded domestic tech giants from pursuing stablecoin plans. While some Chinese firms had initiated RWA projects in Hong Kong, they have maintained a low profile since the China Securities Regulatory Commission (CSRC) advised brokerages to pause such projects in the city last September.
