China takes a tough stance on regulating cryptocurrencies and RWA, strictly prohibiting offshore RMB stablecoins to prevent capital outflows.

The People’s Bank of China (PBOC), together with the Ministry of Public Security and six other departments, issued the latest risk prevention notice on the evening of February 6, 2026. The core of this move is to prevent capital outflows through emerging technologies, especially targeting the highly popular “Real-World Asset Tokenization (RWA)” and “Offshore Renminbi Stablecoins.” This policy not only reaffirms a strict stance against virtual currencies but also extends regulatory red lines to offshore issuance activities and domestic technological support.

China emphasizes monetary sovereignty and strictly bans non-official offshore Renminbi stablecoins

According to Xinhua News Agency, the People’s Bank of China and eight other departments jointly issued a statement on 2/6, clearly stating that virtual currency-related activities are illegal financial activities and are strictly prohibited within China.

The most notable change in this policy is the explicit ban on “RMB-pegged stablecoins.” Authorities classify the issuance of such tokens by domestic and foreign entities without permission as illegal activities threatening monetary sovereignty. From a macro perspective, if RMB-pegged stablecoins circulate widely offshore, it could lead to offshore Renminbi markets operating outside regulatory oversight, weakening the central bank’s control over exchange rates and money supply. This move aims to eliminate potential shadow financial markets and ensure the uniqueness and authority of legal tender.

Virtual currencies are not legal tender, and providing related services may constitute illegal financial activities

The notice clearly states that virtual currencies are not legal tender and should not and cannot be used as currency in the market. Activities such as conducting exchange services between legal tender and virtual currencies within China, virtual currency exchange operations, using virtual currencies as central counterparties for trading, providing information intermediary and pricing services for virtual currency transactions, token issuance financing, and trading of virtual currency-related financial products are suspected of illegal financial activities and are strictly prohibited and to be firmly cracked down upon according to law. Overseas entities and individuals are not allowed to illegally provide virtual currency-related services to domestic entities in any form.

RWA activities are classified as illegal fundraising

In response to the global financial sector’s active exploration of RWA (Real-World Asset Tokenization), Chinese regulators have shown a cautious and strict attitude. The notice regards RWA as potentially involving “illegal public issuance of securities” or “illegal fundraising.” This reflects concerns that asset tokenization could become a covert channel for asset transfer or trigger financial scams targeting small and medium investors. By prohibiting overseas entities from providing services to China and restricting domestic entities from conducting business abroad, the authorities essentially cut off the commercialization path of RWA within China.

Blocking capital outflows: establishing comprehensive regulation and accountability mechanisms

This regulation emphasizes comprehensive control, targeting not only issuers but also extending to technical support and marketing. Any individual or organization providing marketing, payment, or technical support for illegal virtual currency activities will bear legal responsibility. This measure aims to address recent capital flight caused by global market volatility, preventing funds from escaping foreign exchange controls through virtual currency channels. By strictly controlling business registration and payment settlement links, regulators are building a tight firewall to maintain the stability of the domestic financial system.

Additionally, authorities continue to crack down on virtual currency “mining” activities. They will strictly combat illegal activities related to virtual currencies, real-world asset tokenization scams, money laundering, illegal operations, pyramid schemes, illegal fundraising, and related criminal activities using virtual currencies or real-world asset tokenization as a pretext.

Digital Renminbi deployment: global promotion after official token cleanup

While suppressing private stablecoins, China’s official efforts are actively redefining the digital Renminbi (e-CNY) as a “digital deposit currency” that allows interest accrual. This sends a strong signal: the authorities are not opposed to digitalization of currency but aim to realize “state-owned digital tokens.” By clearing out competitors, the digital Renminbi will play a more central role in cross-border settlement and trade. This strategic shift indicates that the future digitalization of the Renminbi will operate entirely under state credit, excluding any involvement of decentralized or private tokens.

This article, “China’s Heavy-Handed Regulation of Virtual Currencies and RWA, Banning Offshore Renminbi Stablecoins to Prevent Capital Outflows,” first appeared on Chain News ABMedia.