- China bans RWA tokenization; impacts on market strategies.
- Market responses see decreased RWA inquiries by 90%.
- Severe restrictions on asset tokenization activity within China.
China’s financial associations, including groups overseen by the People’s Bank of China, declared Real-World Asset tokenization illegal on December 5, 2025, affecting financial practices within mainland China.
The decision impacts mainland financial markets, reducing RWA inquiries by 90% and leading to declines in relevant tech stocks, illustrating the broad economic influence of regulatory moves.
China’s seven financial associations issued a joint warning on December 5, 2025, reclassifying Real-World Asset (RWA) tokenization as illegal. They prohibit member companies from participating in issuance or trading activities within mainland China. The notice emphasizes the unapproved status.
Involved are seven associations including National Internet Finance Association and others, with oversight by the People’s Bank of China. The notice identifies RWA alongside stablecoins as illegal, citing risks like fictitious assets and speculative trading without regulatory approvals.
The announcement caused Mainland Chinese companies to shelve RWA projects, freezing or postponing many initiatives. This move induced a significant drop in RWA inquiries in Hong Kong, exceeding 90%. Many firms now opt for alternative solutions like Real Data Assets (RDA).
Financial repercussions are evident with a decline in related stocks, including Langxin Group. The absence of project-specific approvals from regulatory bodies further affects companies operating under an “overseas entity + domestic team” model. No direct impact is noted on global crypto marketplaces.
This regulatory action aligns with China’s previous virtual asset prohibitions, inciting uncertainty among firms. The decision aims to seal existing loopholes and tighten control over unauthorized activities. It echoes earlier moves against mining and stablecoin transactions.
Potential outcomes include a shift to more compliant technological solutions, with firms reevaluating operational strategies.
Currently, there seems to be a lack of direct quotes from prominent figures or officials regarding the recent joint risk warning issued by China’s financial industry associations about RWA tokenization.
This regulatory posture may amplify regulatory scrutiny, influencing both local and regional blockchain initiatives to align with compliance demands stemming from these historical regulatory trends.
