Mainland China has officially extended its comprehensive cryptocurrency prohibition to include RMB-pegged stablecoins and tokenized real-world assets (RWAs). A joint notice issued on February 6, 2026, by the People’s Bank of China (PBoC), the China Securities Regulatory Commission (CSRC), and six other top agencies, classifies these emerging sectors as "illegal financial activities." The directive explicitly forbids any domestic or foreign entity from issuing renminbi-linked stablecoins overseas without prior state authorization, citing grave risks to "monetary sovereignty." Simultaneously, the framework targets the "shadow" infrastructure of the industry, clamping down on technology providers and intermediary services that facilitate RWA tokenization. This aggressive containment strategy marks a historic decoupling from Hong Kong, where the HKMA is preparing to grant its first batch of stablecoin licenses as early as March. As Beijing prioritizes the adoption of the interest-bearing digital yuan (e-CNY), the new rules create a definitive barrier between the state-controlled ledger and the global decentralized economy.

• The ban extends to all Renminbi-related markets, covering both onshore (CNY) and offshore (CNH) currency variants.
• Unlicensed platforms for tokenized real-world assets will now be prosecuted as illegal fundraising or unauthorized public securities offerings.
• Regulatory focus has shifted toward "data center" mining fronts and the growing influence of US dollar-denominated stablecoins.

The February 6 notice serves as a significant update to China’s landmark 2021 virtual currency ban. By explicitly naming stablecoins and RWA tokenization, regulators are closing loopholes that some firms believed existed in the "grey areas" of the law. The PBoC argues that stablecoins pegged to legal tender act as "disguised fiat currencies," performing circulation functions that bypass the central bank's oversight. To combat this, the new rules mandate that any domestic business—or foreign entity under its control—must obtain explicit permits before engaging in any digital currency issuance worldwide.

This crackdown is particularly aimed at preventing "capital flight" and preserving the integrity of the domestic financial system. In 2025, reports suggested that authorities were briefly considering trials for private yuan-pegged tokens; however, this latest notice definitively ends that speculation. Instead, the government is doubling down on the e-CNY, which began allowing commercial banks to pay interest to digital wallet holders in January 2026. This move is designed to make the sovereign CBDC more competitive against the interest-bearing yield models seen in US-regulated stablecoins.

A unique aspect of the 2026 notice is its focus on the "plumbing" of the crypto world. Regulators are no longer just banning the assets; they are targeting the service providers. Providing information technology, marketing, or intermediary services for tokenized real-world assets is now a high-risk activity that can lead to criminal charges for "illegal financial operations." This includes a continuous pledge to hunt down "shadow" data centers—mining operations that have disguised themselves as high-tech research hubs to avoid the 2021 mining ban.

The CSRC has been given the mandate to oversee the filing of any domestic entities attempting to tokenize assets abroad. Paperwork for such projects must now describe the domestic company, the underlying assets, and the token issuance strategy in exhaustive detail. This regulatory friction is intended to ensure that while European firms push for DLT Pilot Regime changes and US universities pivot to Bitcoin ETFs, Chinese capital remains strictly within regulated, non-blockchain domestic rails.

While the mainland tightens its grip, Hong Kong continues to position itself as a global Web3 laboratory. The Hong Kong Monetary Authority (HKMA) has received 36 applications for its new stablecoin licensing regime, with major names like Ant Group and JD.com's subsidiaries reportedly in the race. Eddie Yue, Chief Executive of the HKMA, confirmed that the first licenses are expected by March 2026. However, the path is fraught with geopolitical tension. Reports indicate that mainland regulators have raised "reservations" about the Hong Kong plan, leading to several applicants temporarily pausing their trials.

The divergence highlights a "one country, two systems" approach to digital finance. Hong Kong is using the Stablecoins Ordinance to attract institutional liquidity and explore cross-border payments, even as Beijing warns against the "dollarization" of the digital asset market. At a recent Senate Banking Committee hearing, US Treasury Secretary Scott Bessent noted that Hong Kong’s program might be viewed as an attempt to establish a Chinese-led alternative to American financial leadership. For global investors, the result is a bifurcated market: a high-tech "walled garden" in mainland China and a regulated, blockchain-native gateway in Hong Kong.

Quotes and Expert Opinions

“Virtual currency-related business activities constitute illegal financial activities. Recently, influenced by various factors, speculative activities related to virtual currencies and the tokenization of real-world assets have occurred frequently, posing new challenges for risk prevention and control.” — Joint Regulatory Notice from PBoC, CSRC, and MIIT, February 2026

FAQs

Does the new ban affect stablecoins that are already issued outside of China?
Yes. The notice explicitly states that no entity or individual, whether domestic or foreign, may issue RMB-pegged stablecoins abroad without the prior consent of the Chinese government. It also prohibits domestic entities from using foreign "controlled" entities to issue any virtual currencies without authorization.

What is the difference between the mainland ban and Hong Kong's stablecoin licenses?
Mainland China treats all private crypto payments and stablecoins as illegal financial activity to protect its monetary sovereignty. Hong Kong, however, is a separate regulatory jurisdiction that is actively licensing companies to issue stablecoins under strict KYC and reserve rules, acting as a "test bed" for regulated innovation.

What happens to companies providing IT services for tokenization in China?
Providing technical or intermediary services for tokenized real-world assets within China is now considered a suspected "unlawful financial operation." This means developers and tech firms could face penalties similar to those for illegal fundraising or unauthorized public offerings.