China Reinstates Ban on Cryptocurrencies and Tokenization
- China reinforces cryptocurrency ban, impacting Bitcoin BTC -1.55% and Ethereum ETH +1.82% .
- Restrictions extend to RMB-pegged stablecoins and RWA tokens.
- Offshore issuance requires regulatory approval, affecting market dynamics.
On February 6, 2026, China’s authorities, including the PBOC and CSRC, issued a directive reinforcing the ban on virtual currencies and regulating RWA tokenization activities nationwide.
These regulations could significantly impact the cryptocurrency market by curtailing virtual currency activities and offshore issuance, affecting key assets like Bitcoin (BTC) and Ethereum (ETH).
On February 6, 2026, China’s People’s Bank and other key regulators issued Document No. 42 reaffirming their ban on virtual currencies including Bitcoin and Ethereum. The document additionally prohibits unapproved RMB-pegged stablecoins both domestically and offshore.
In a coordinated move, the People’s Bank, CSRC, and other ministries forbade onshore tokenization of real-world assets. Approvals are now required for offshore issuance targeting China-based assets, under CSRC oversight. This extends control over China’s digital currency landscape.
The regulatory update has led to concerns over its ramifications on global cryptocurrency markets. While China’s decision follows previous actions, the inclusion of RWA tokens and stablecoins is expected to have broad implications for digital assets linked to Chinese entities.
Market analysts express caution as these regulations may lead to further capital flight and challenges in adopting blockchain technology for asset management within China. This echoes China’s longstanding stance against virtual currencies’ illegitimate activities.
The ban may force businesses and technology developers to reconsider their strategies involving blockchain. Although there are immediate impacts, long-term effects, particularly regarding compliance with international digital asset standards, remain uncertain as authorities enforce strict regulations.
Historically, China’s strict policy on digital currencies often leads to increased regulatory complexity. “Some argue it may spur innovation elsewhere, as companies seek favorable jurisdictions.” The directive’s broader economic impact will be monitored globally in the coming months.
