China bans another emerging tech after blanket crypto ban

For years, Beijing has tightened restrictions connected cryptocurrencies done a bid of escalating measures.

These see the 2017 prohibition connected archetypal coin offerings (ICOs) and home exchanges, the 2019–2020 regulatory model that constricted blockchain enactment to government-approved usage cases, and the sweeping September 2021 enactment that outlawed trading and mining nationwide.

In precocious November, the People’s Bank of China (PBoC) again reaffirmed that:

“Virtual currencies bash not person the aforesaid ineligible presumption arsenic fiat currencies, deficiency ineligible tender status, and should not and cannot beryllium utilized arsenic currency successful the market.” 

Now regulators are broadening the explanation of amerciable crypto enactment -and real-world plus (RWA) tokenization has go the newest target.

Related: What is Bitcoin mining? Explained

Tokenization of RWAs involves converting ownership rights of real-world assets into integer tokens, allowing these assets to beryllium managed, traded, and transferred on-chain.

On Dec. 5, 7 of China’s astir important fiscal manufacture associations - representing banking, securities, funds, futures, outgo clearing, listed companies and net concern - issued a associated informing declaring that each RWA tokenization activities are amerciable successful mainland China.

The announcement stated that regulators “have not approved immoderate real-world plus tokenization activities,” marking the archetypal clip this emerging assemblage has been explicitly named alongside stablecoins, mining and airdrops arsenic prohibited.

The past clip this conjugation mobilized was Sep. 24, 2021, erstwhile 10 authorities departments jointly forced exchanges and mining farms to exit the state - an enactment that drove China’s stock of planetary Bitcoin hashrate from astir 75% to astir zero.

Authorities warned that RWA tokenization poses superior risks including fake assets, task failures and speculative trading.

Officials are besides acrophobic that tokenized assets could go a mechanics for superior flight, enabling home holders to person accepted assets into integer tokens and nonstop them offshore beyond banking and foreign-exchange controls.

Related: What is tokenization? Explained

The December announcement reiterates that each virtual currencies, including stablecoins, “lack ineligible status” and cannot circulate wrong mainland China.

Individuals and organizations are banned from issuing, exchanging oregon raising funds utilizing tokens oregon stablecoins. This applies adjacent erstwhile the issuing institution is offshore but employs unit based wrong China, extending earlier enforcement boundaries.