China is drawing a firm line in the sand when it comes to digital money.
But what’s allowed—and what’s banned—might surprise you.
On Friday, Beijing doubled down on its crackdown.
It banned unauthorised offshore issuance of yuan-pegged stablecoins and tightened rules around virtual currencies.
The central bank said virtual currencies remain illegal and warned that any business tied to them is considered an “illegal financial activity.”
Even domestic companies and their overseas arms can’t issue crypto without approval.
“Virtual currencies do not have the same legal status as fiat currencies,” the People’s Bank of China said.
Yet, there’s a silver lining for certain digital assets.
Tokens backed by real-world Chinese assets—so-called RWA (real-world asset) tokens—are now being brought under an official regulatory framework.
“The biggest breakthrough is a clear separation between virtual currencies and RWA,” said Louis Wan, CEO of Unified Labs.
Digital Yuan Expansion
Winston Ma, an adjunct professor at NYU, explained that China wants only its digital yuan to circulate legally.
He does not want a jumble of private stablecoins floating around global exchanges.
Experts see this as a potential milestone. “To some extent, this means China is allowing the issuance of offshore tokens based on onshore assets,” said Alex Zuo of crypto custodian Cobo.
So, while Bitcoin and other cryptos remain off-limits, tokenising real-world Chinese goods might finally have a legal path.
The real question now: will these new rules spark innovation—or just more red tape?
