China bans overseas issuance of yuan stablecoins, tightens tokenization rules

Chinese regulatory authorities have announced an expansion of their crackdown on cryptocurrencies to include stablecoins and asset tokenization. CoinDesk reported that the announcement was made jointly by eight state agencies, including the People's Bank of China (PBOC) and the China Securities Regulatory Commission (CSRC). The report reiterates the country's comprehensive ban on crypto, prohibiting the trading, issuance, and facilitation of transactions in assets like BTC, ETH, and USDT. The new measures single out fiat-pegged stablecoins for special investigation. Chinese authorities noted that stablecoins threaten monetary policy by mimicking the core functions of a national currency. Consequently, a new rule has been added prohibiting both domestic and overseas Chinese companies, including the foreign branches of domestic firms, from issuing yuan-based stablecoins abroad without government approval. Alongside this, controls on tokenization have been tightened. Chinese domestic companies seeking to tokenize overseas assets must now obtain regulatory approval or submit relevant documentation and meet established standards. In 2021, China declared all crypto-related business activities illegal and banned cryptocurrency mining.