China widens crypto ban to choke off stablecoins and asset tokenization

China’s top financial regulators have expanded the country’s cryptocurrency ban to cover stablecoin issuances and the tokenization of real-world assets. The directive targets offshore branches of domestic firms and foreign entities, aiming to protect monetary sovereignty and prevent capital flight.

A joint notice released Feb. 6 by eight agencies, including the People’s Bank of China and the China Securities Regulatory Commission, marked the most aggressive tightening of capital controls since the 2021 prohibition on Bitcoin mining and trading. By classifying these activities as illegal, Beijing is effectively mandating that future crypto innovation occur within state-approved, permissioned infrastructure.

Under the new rules, foreign entities are barred from offering stablecoin or tokenization services to Chinese residents, while domestic firms and their overseas branches cannot issue digital currencies without explicit government approval.

China, Beijing