China bans offshore issuance of yuan stablecoins across the board

China has moved to tighten regulation of crypto assets by imposing a blanket ban on the offshore issuance of yuan-pegged stablecoins.

The People’s Bank of China (PBOC) said on the 6th that it, together with government agencies including the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Public Security, the State Administration for Market Regulation, the National Financial Regulatory Administration, the China Securities Regulatory Commission and the State Administration of Foreign Exchange, released a “Notice on Further Preventing and Addressing Risks Related to Virtual Assets and Tokenization of Real-World Assets (RWA).”

In the notice, Chinese authorities specified that “without approval, no entity or individual, domestically or abroad, may issue yuan-linked stablecoins overseas.” Previously, China had halted efforts to advance yuan stablecoins in Hong Kong on the grounds that they could threaten the adoption of central bank digital currency.

It also reaffirmed that crypto assets such as Bitcoin (BTC), Ethereum (ETH) and Tether (USDT) do not have the same legal status as fiat currency and cannot circulate in the market as money.

Existing regulations related to crypto assets will remain unchanged. The notice stressed that “activities such as exchange and trading intermediation for virtual assets, price quotation services, fundraising through token issuance, and trading of related financial products are defined as illegal financial activities and are uniformly prohibited,” adding that it would also block overseas operators from providing related services to entities within China.

The authorities also said that “RWA tokenization activities and the provision of related services may likewise lead to illegal securities issuance and illegal fundraising and are in principle prohibited,” and added that they would strengthen enforcement by restricting measures such as financial institutions’ support for payment and settlement and internet companies’ provision of publicity and marketing.