Mainland China has widened its long-standing cryptocurrency restrictions, formally extending its ban to include RMB-pegged stablecoins and tokenized real-world assets (RWAs). The move comes through a new joint regulatory notice issued by the People’s Bank of China (PBoC), the China Securities Regulatory Commission (CSRC), and other government agencies.
While Beijing tightens its grip, Hong Kong is moving in the opposite direction preparing to issue its first licensed stablecoin approvals.
New guidance targets stablecoins and RWAs
Under the updated framework:
- RMB-pegged stablecoins cannot be issued abroad without prior approval.
- Domestic firms and foreign entities they control are barred from issuing virtual currencies globally without proper authorization.
- Tokenization of real-world assets may be treated as illegal financial activity if conducted without licenses.
Regulators emphasized that stablecoins linked to legal tender could affect monetary sovereignty because they perform certain circulation and settlement functions similar to traditional currency.
The notice also formally defines tokenization as the use of encryption and distributed ledger technology to issue and trade ownership rights, income streams, or other asset interests. Platforms offering RWA services without proper authorization could face classification as unlawful financial operators.
Mining enforcement tightened
The updated notice reiterates China’s blanket ban on crypto mining and flags new enforcement priorities:
- So-called “shadow data centers” disguising mining activity
- Equipment relocation to evade local oversight
- Links between mining operations and speculative trading
The National Development and Reform Commission will continue enforcing strict controls on mining infrastructure.
China first banned crypto transactions outright in 2021, citing volatility and illegal activity risks. The new expansion reflects concerns not only about speculation, but also about capital flows and financial stability.
Hong Kong takes a different path
Hong Kong Monetary Authority,While mainland China tightens restrictions, Hong Kong is preparing to roll out a licensed stablecoin regime.
The Hong Kong Monetary Authority (HKMA) is reviewing dozens of applications and is expected to issue its first stablecoin licenses as early as March. The framework requires permits for entities issuing stablecoins in Hong Kong or linking them to the Hong Kong dollar.
Major firms such as Ant Group and JD.com have reportedly shown interest in the licensing regime.
However, preparations in Hong Kong have faced scrutiny from mainland authorities, particularly the PBoC, reflecting policy tensions between Beijing’s restrictive stance and Hong Kong’s ambition to position itself as a digital asset hub.
Dollar stablecoin concerns and financial sovereignty
Beijing’s expanded restrictions also reflect growing concern over the dominance of U.S. dollar-backed stablecoins in global digital asset markets. Authorities have cited risks including:
- Illicit financial flows
- Organized crime usage
- Capital outflows
- Erosion of monetary control
Stablecoins have increasingly been used for cross-border transfers, decentralized finance activity, and tokenized asset settlements developments Chinese regulators view as systemic risks.
What this means for the crypto market
China’s move reinforces its zero-tolerance stance toward cryptocurrency activity on the mainland. The inclusion of tokenized real-world assets suggests regulators are aiming to prevent regulatory arbitrage through blockchain-based financial products.
At the same time, Hong Kong’s licensing push highlights a strategic divergence within the broader Chinese financial ecosystem.
The result is a sharper geopolitical split:
- Mainland China prioritizes monetary sovereignty and financial control.
- Hong Kong seeks to attract regulated digital asset innovation.
The next phase of stablecoin development in Asia may depend on how this regulatory divide evolves.
