By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions.
“Recently, influenced by various factors, speculative activities related to virtual currencies and the tokenization of real-world assets have occurred frequently, posing new challenges and situations for risk prevention and control,” regulators including the People’s Bank of China (PBOC) and the China Securities Regulatory Commission said in a notice Friday (Feb. 6).
The announcement was cited in a report by Coindesk, which noted that the ban extends to foreign entities and people offering such services inside China. It also blocks domestic organizations from issuing digital currencies overseas without regulatory authorization.
The notice argued that stablecoins can duplicate critical functions of sovereign money and thus provide a threat to monetary control. Thus, the new rules forbid any entity, either in China or overseas, from issuing a RMB-linked stablecoin without the government’s permission.
Chinese companies that want to tokenize assets overseas must not get approvals or file with regulators, while their financial and tech partners will face increased compliance standards. The new rules follow the ban on crypto mining and crypto-related business activity imposed in 2021.
The news follows reports from last year that Chinese authorities, including the PBOC and the Cyberspace Administration of China, had instructed the country’s big tech companies to hold off on launching stablecoin projects.
In other crypto regulation news, recent research by PYMNTS Intelligence and Citi has found that blockchain’s next leap will be shaped by regulation, although lawmaker gridlock around key stablecoin yield questions has left U.S. crypto market legislation in limbo.
“The debate has reached such a crescendo that Citi analysts have noted the growing chance that the CLARITY Act’s passage could be delayed beyond 2026, although there is also a chance it may still pass this year,” PYMNTS wrote last week.
And in Europe, tokenized instruments such as the digital euro are gaining momentum as a payment sovereignty play.
“To put it bluntly, we are very dependent on U.S. corporations in payments today - too dependent. Payments are part of our critical infrastructure,” Burkhard Balz, member of the Executive Board of the Deutsche Bundesbank, said in a speech last month.
“And we really ought to stand on our own two feet when it comes to critical infrastructure. The digital euro would be the first and only digital means of payment built on a European infrastructure that could be used seamlessly throughout the euro area.”
