Tokenization of real-world assets is also restricted without regulatory permission, including services from foreign firms.
China has doubled down on its stance on cryptocurrency, moving to block firms from issuing digital currencies abroad. The country’s central bank, along with seven other agencies, said in a joint directive that firms based in China cannot issue cryptocurrencies or yuan-linked stablecoins overseas without permission from the authorities.
In the directive, identified as Yinfa [2026] No. 42, authorities said that the stablecoins tied to fiat currency can act like money in everyday transactions, which is why they must be closely supervised.
The notice repeats China’s long-standing position that virtual currencies such as Bitcoin, Ethereum, and Tether are not the same as official money. Regulators said these digital assets are created by private groups and rely on blockchain technology instead of government support.
Because of this, they do not have the same legal status as fiat currency and cannot be used as official payment tools in the country. Authorities warned that any business dealing with virtual currency trading or services may be treated as illegal financial activity under Chinese law.
The regulators further listed several banned activities linked to cryptocurrencies. These include changing traditional money into digital currency, trading one crypto asset for another, acting as a middleman in crypto transactions, and offering price or information services related to crypto trading. The notice said these actions may involve illegal fundraising or unapproved securities sales.
Authorities stressed that such activities are strictly prohibited and will be resolutely abolished according to the law. The directive further blocks foreign companies or individuals from offering crypto services to businesses operating inside China.
The directive addresses tokenization of real-world assets. Regulators described tokenization as the process of turning ownership rights or income benefits from assets into blockchain-based tokens.
The notice states that conducting such tokenization domestically without approval may amount to illegal securities issuance and other unlawful financial practices. Similar restrictions apply to foreign companies offering tokenization services to Chinese businesses unless regulatory permission is granted.
The central bank has previously confirmed that cryptocurrency operations remain illegal within China’s borders. In a previous report, the PBOC said, “Virtual currencies do not have the same legal status as fiat currencies, lack legal tender status, and should not and cannot be used as currency in the market.”
The latest directive expands regulatory oversight beyond domestic activity by targeting international crypto services connected to Chinese companies. Authorities said this is ongoing work to prevent financial instability linked to virtual currencies.
However, regulators did not explain what punishments companies might face for breaking the rules or how businesses can apply for permission to issue approved digital assets.
