Mainland Chinese industry associations have issued a joint warning to real-world asset (RWA) tokenisation providers after Beijing turned on the screws, dashing hopes that Beijing might ease restrictions on digital-asset activities amid competition with the US.
Tokenising real-world assets involves multiple risks such as fake assets, business failure and speculative trading, and Chinese authorities had not approved any such activities, seven industry bodies, including the National Internet Finance Association of China, the China Banking Association and the Securities Association of China, said in a notice on Friday.
These associations are directly overseen by regulators including the People’s Bank of China (PBOC) and the China Securities Regulatory Commission (CSRC).
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This was the industry’s first warning as Chinese authorities have explicitly targeted RWA tokenisation, which refers to the process of creating representations of traditional assets on a blockchain and is touted as a way to allow faster and cheaper transactions.
The People’s Bank of China and regulators said last week that stablecoins did not meet the mainland’s requirements on customer identification and anti-money-laundering. Photo: AFP alt=The People’s Bank of China and regulators said last week that stablecoins did not meet the mainland’s requirements on customer identification and anti-money-laundering. Photo: AFP>
Chinese authorities had recently underlined their tough stance on cryptocurrency, thwarting expectations earlier this year that Beijing might ease its hostility towards digital assets after policymakers in the US took a more accommodating stance towards crypto.
The PBOC, along with the public security ministry, the cyberspace administration, the top court and other key financial regulators, said in a statement last week that stablecoins did not meet the mainland’s requirements on customer identification and anti-money-laundering.
Industry associations said that member companies must neither participate in the issuance and trading of cryptocurrencies and tokenised RWA in China, nor provide related services for customers seeking to engage in such activities.
Such warnings have raised fresh concerns about Hong Kong’s ambitions to become a regulated hub for the increasingly mainstream asset class.