After stablecoins, it's RWA's turn.

Article Introduction

The joint risk warning from seven associations not only halts the current development of RWA, but may also stifle the unlimited imagination for the future of asset tokenization in China.

On December 5th, seven national-level industry associations, including the China Internet Finance Association, jointly issued a "Risk Warning on Preventing Illegal Activities Involving Virtual Currencies,"for the first time explicitly including the tokenization of real-world assets within the scope of illegal financial activities.

Just one week earlier, the People's Bank of China had convened a meeting of 13 departments, including the Ministry of Public Security, the Cyberspace Administration of China, and the Central Financial Affairs Commission, to coordinate the work of combating virtual currency trading and speculation.

The meeting explicitly emphasized the continued adherence to the prohibitive policy towards virtual currencies, specifically pointing out that stablecoins are a form of virtual currency. The regulatory focus has expanded from purely virtual currencies to the broader field of crypto assets, this time precisely targeting RWA, a new global financial hotspot. From Stablecoins to RWA

01 From Stablecoins to RWA

Domestic regulatory policies for virtual currencies are showing an upgrading trend of precision and segmentation. The coordination mechanism meeting on combating virtual currency trading and speculation held on November 28 has the participation of 13 key departments, covering important areas such as financial supervision, judiciary, cyberspace administration, and public security. This meeting not only reiterated that virtual currency-related business activities are illegal financial activities, but also specifically defined stablecoins: Stablecoins are a form of virtual currency, and pointed out that they cannot effectively meet requirements for customer identification, anti-money laundering, etc. Meanwhile, the risk warnings from the seven associations further expanded the scope of regulation to the RWA (Real-World Asset) field. The document explicitly stipulates that my country's financial regulatory authorities have not approved any real-world asset tokenization activities, and requires all member units not to participate in RWA issuance and trading activities within China, and not to directly or indirectly provide related services to customers. From cryptocurrencies to stablecoins, and then to RWA, domestic regulators are building a complete prevention and control system. In stark contrast to the booming development of RWA globally, China has chosen the most cautious regulatory path. Boston Consulting Group predicts that the global RWA market will climb to $16 trillion by 2030. Global financial giants such as BlackRock and Goldman Sachs have already entered the RWA field, and the tokenization of US Treasury bonds has increased more than sevenfold in a short period. Hong Kong, as an international financial center, is also actively promoting RWA development. The Hong Kong Monetary Authority's Ensemble Sandbox program already covers multiple RWA projects, involving fixed income and investment funds, green and sustainable finance, and other areas. Recently, some real estate companies have even explored tokenizing commercial real estate projects for financing through RWA. However, in mainland China, RWA faces a strict regulatory environment. The risk warnings from the seven associations explicitly categorize RWA as illegal financial activity, effectively cutting off its potential for development within the country. Clearly, mainland China places greater emphasis on financial stability and risk control, adopting a cautious approach to new business models that may trigger financial risks. Why is RWA under intense scrutiny? RWA operations face multiple risks, primarily stemming from breaches of the legal framework and cross-border regulatory challenges. Firstly, there are legal issues in the asset ownership confirmation process. my country's property law system is based on tangible assets, but the nature of tokenized assets remains unclear. This ambiguity in legal attributes creates potential problems for subsequent operations. Secondly, the valuation process also faces challenges. Traditional asset valuation methods are ill-suited to the 24/7 global trading environment of tokenized assets, especially for non-standardized assets such as artworks and intellectual property, whose value fluctuates greatly and is difficult to objectively and fairly price. More importantly, there's the issue of cross-border data flows. RWA (Real Money Investing) transactions may circumvent existing foreign exchange controls, achieving de facto cross-border asset flows through tokenization, which directly conflicts with current capital account control policies. Stablecoins, as an important component of the RWA field, also carry unique risks. The People's Bank of China has pointed out that stablecoins cannot effectively meet requirements for customer identification and anti-money laundering, and pose a risk of being used for illegal activities such as money laundering, fundraising fraud, and illegal cross-border fund transfers. The risk warnings issued by the seven associations have put forward clear and targeted prohibitions on various financial institutions, essentially closing off RWA's development path in the Chinese market. Banks and payment institutions are prohibited from providing any form of financial services and credit support to virtual currency "mining" enterprises and projects. Securities, fund, and futures institution members are prohibited from providing services for the issuance and trading of virtual currencies, real-world asset tokens, and related financial products within China. Internet platform member units are prohibited from providing any form of marketing, promotion, information technology, or other services for business activities related to the issuance and trading of virtual currencies and real-world asset tokens within China. All member units should conduct comprehensive risk warnings and awareness campaigns regarding virtual currencies and real-world asset tokens, reminding the public to be aware of the risks and stay away from illegal activities. These targeted prohibitions reflect the logic of combining functional and behavioral regulation, covering all financial business aspects that RWA (Real-World Asset Token) business may involve, forming a comprehensive regulatory network. Behind the continuous refinement of regulatory policies lies China's firm stance on financial security and risk prevention. Pan Gongsheng, Governor of the People's Bank of China, clearly stated at the 2025 Financial Street Forum that the policy documents issued since 2017 regarding the prevention and handling of risks associated with virtual currency trading speculation remain valid. For those still exploring RWA (Real Money Market Fund), the risk warnings from the seven associations send a clear signal: China has made its choice between financial security and innovation. The RWA industry in China has virtually no room for development in the foreseeable future.