China’s New Regulatory Framework Formalizes Tokenization of Real-World Assets
On February 6, 2026, China set rules for tokenizing real assets using blockchain. Eight state bodies, including market regulators and police, helped write the rules. They guide how onshore assets become digital tokens and move offshore under strict controls.
Breaking the Regulatory Gray Zone
Before this, tokenizing China-based assets meant dealing with unclear rules. A warning in August 2025 stopped local firms from engaging in offshore token activities. The new rules now fix these gaps. They mark what counts as a real asset and set safe ways for token activities. The rules draw a line between these tokens and digital coins that are still banned.
Defining “Real-World Assets” and Setting Compliance Rules
The new notice calls an asset real when its rights turn into a digital token using cryptography. These tokens can then be traded like other securities. Token activities at home are not allowed unless regulators approve them and they go through official channels. This change shifts from a flat ban to a controlled system that grants permission only after meeting strict checks. Experts see this as replacing old, broad limits with a system that splits oversight into clear layers.
Clear Lines of Regulatory Responsibility
Key agencies now share duties. The National Development and Reform Commission handles real assets linked to debt outside China. The China Securities Regulatory Commission takes charge of tokens related to equity and asset securitization. The State Administration of Foreign Exchange oversees funds moving back after going offshore. The notice also mentions coins tied to fiat money. Some lawyers warn that these coins might face extra legal checks as they may look like hidden foreign exchange.
Regulatory Guidelines for Offshore Issuance of Tokenized Securities
The CSRC put out detailed steps for issuing tokens that earn cash flows from assets in China. The guidelines list scenarios that cannot happen, such as risks to national security. They also require clear disclosures on how tokens are set up and on documents from offshore sites. This change makes token issuance subject to securities laws. As a result, compliance costs and checks will rise. Established banks and large industries—rather than small startup firms—are expected to take the lead on token adoption.
Offshore RWA Services: Clear Risk Controls for Financial Institutions
Firms offering offshore token services must meet strict requirements. They need to check customer identities and guard against money laundering in line with local system checks. Only licensed institutions can perform tokenization. This rule ties token practices close to China’s wider finance system.
Practical Hurdles Remain: On-Chain Implementation Challenges
Even with new rules, technical challenges stay. Token standards differ across regions, so making tokens work together is hard. Tokens that earn yields are set to pass returns through on-chain transfers. Tokens like bonds face issues with their complex design and wallet support. Equity tokens sometimes show asset differences from one wallet to another. Many say that clear rules alone will not fix these issues. A strong on-chain setup is needed to keep yields steady and tokens connected.
A Paradigm Shift: Integration Without Embracing Crypto
The new 42 Notice and the CSRC guidelines do not open the door to cryptocurrencies. Digital coins stay out of legal finance channels. Coins tied to traditional money get extra reviews. Real assets now follow strict securities and cross-border finance rules. China uses tokenization to digitize assets only under its financial supervision. This move works to use blockchain tech to safeguard the system while keeping tokens under firm control.
What This Means for Investors and Innovators
Investors and developers now see clearer paths to tokenizing assets like bonds, stocks, and claims on China’s economy. Offshore token issuance is allowed under CSRC rules. However, funds raised and tokens marketed on local chains will need to pass strict reviews. Established firms with technical strength in token systems will likely lead, provided they meet high checks and can work with varied technical standards.
Stay informed on the latest in tokenization, DeFi, and news on real assets by following Wu Blockchain’s updates on Twitter and Telegram.
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📝 About This Article
This article was generated by Hivebox AI in collaboration with nGRND.
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