China has effectively shut the door on real-world asset tokenization, making it clear that the country is not debating how to regulate RWA - but whether it should exist at all.
A sweeping joint warning from China’s core financial industry bodies reframes RWA not as an innovation awaiting rules, but as an outright illegal financial practice.
Key Takeaways
China has fully banned real-world asset tokenization, treating it as illegal financial activity rather than innovation.
No RWA projects, platforms, or services have legal standing inside mainland China.
Domestic individuals supporting overseas RWA projects can still face legal consequences.
Mainland China is no longer seeking regulatory clarity on RWA and has rejected the model outright.
Unlike previous regulatory signals that left room for interpretation, this statement takes a decisive stance. Tokenizing assets such as property, commodities, or financial products is described as a form of disguised fundraising and trading, comparable to issuing unauthorized securities or debt instruments. From the regulators’ perspective, the technology behind RWA is irrelevant. What matters is that money is raised, traded, and promised returns outside the approved financial system.
The warning was jointly issued by several heavyweight institutions, including the National Internet Finance Association of China alongside associations representing banking, securities, asset management, futures, listed companies, and payment clearing. Such coordination signals alignment across China’s financial oversight ecosystem rather than a narrow policy opinion.
No licenses, no legitimacy
Authorities emphasized that not a single RWA-related activity has been authorized by Chinese regulators. As a result, every RWA-labelled project currently circulating – whether asset issuers, platforms, intermediaries, or service providers – is considered to be operating without legal basis.
By classifying RWA as a financing and trading mechanism, regulators automatically place it under existing securities law and long-standing bans on illegal financial business. This means token issuance, secondary trading, and yield or profit distribution are all treated as prohibited conduct. The statement explicitly links RWA promotion to fraud risks, warning that criminals often combine narratives around stablecoins, mining, or so-called “asset-backed” tokens to run pyramid schemes and illegal fundraising operations.
Offshore structures offer no protection
One of the most consequential elements of the warning is its extraterritorial reach. Chinese nationals or mainland-based teams that knowingly support overseas RWA or crypto-token projects can still be held accountable. If a company is registered abroad but relies on staff, contractors, or operations inside mainland China, regulators will treat it as providing domestic financial services.
This interpretation effectively dismantles the entire RWA support ecosystem inside China. Developers, consultants, marketers, KOL promoters, payment providers, and technical outsourcers are all included. In practical terms, RWA projects cannot legally touch the mainland at any stage of development or promotion.
A permanent rejection, not a pause
The language of the document leaves little ambiguity. There is no reference to sandbox programs, pilot initiatives, or future compliance pathways. Arguments based on asset backing, smart contracts, or offshore custody are dismissed outright. Any structure involving token-based financing or trading is deemed illegal regardless of design.
Crucially, regulators reject the idea that China is still “waiting for clarity.” The statement makes clear that mainland China has already made its decision. RWA is considered too risky to be tolerated within the domestic financial system. For market participants, the choice is binary: fully relocate to a foreign jurisdiction with independent regulatory approval, or abandon RWA entirely.
