China Expands Crypto Crackdown: Offshore Yuan Stablecoins and Tokenized Assets Banned
Chinese regulators have banned the unauthorized creation of yuan-pegged stablecoins and tokenized real-world assets to strengthen...
Quick overview
- Chinese regulators have banned the unauthorized creation of yuan-pegged stablecoins and tokenized real-world assets to enhance control over the currency.
- The new rules require government approval for any digital assets tied to the renminbi, closing legal loopholes for offshore yuan projects.
- The digital yuan (e-CNY) is transitioning to a 'digital deposit money' framework, allowing interest payments and integration into the national deposit insurance system.
- China's strict regulations contrast sharply with the U.S. approach, which has established a federal framework for payment stablecoins under the GENIUS Act.
Chinese regulators have banned the unauthorized creation of yuan-pegged stablecoins and tokenized real-world assets to strengthen control over the country’s currency.
On February 6, 2026, the People’s Bank of China and seven other agencies announced that no company, inside or outside China, can offer digital assets tied to the renminbi without government approval.
This new rule closes loopholes that let offshore yuan projects operate in uncertain legal territory, reinforcing China’s strict policy against private digital currencies.
PBOC Targets “Disguised” Fiat: The Stablecoin Lockdown
The new rules state that stablecoins tied to fiat currencies act like money in disguise, which threatens the yuan’s stability and China’s strict capital controls.
- Global Reach: The ban applies to both the onshore yuan (CNY) and the offshore yuan (CNH).
- Approval Mandatory: No individual or unit—regardless of location—may issue RMB-linked tokens without the express consent of the PBOC.
- Enforcement: Facilitating these transactions, including marketing or technical support by domestic firms for offshore projects, now constitutes “illegal financial activity.”
Tokenized Bonds and Equities Under Fire
The new rules also address the expanding market for tokenized real-world assets. Blockchain-based bonds, stocks, and commodities now face strict regulation. The China Securities Regulatory Commission warned that issuing these assets without approval could be prosecuted as illegal securities offerings, and current Chinese law does not guarantee ownership rights for these digital assets.
🇨🇳 BREAKING
China declares a full-scale crackdown on cryptocurrencies:
• No legal recognition of crypto as “money”
• Any crypto-related business = financial crime
• Complete ban on foreign crypto services operating inside China pic.twitter.com/VvjYRsh8Zs— SilencedSirs◼️ (@SilentlySirs) February 6, 2026
The Digital Yuan (e-CNY) Enters the “Deposit Era”
As private tokens are phased out, the state-backed e-CNY is changing significantly. Starting January 1, 2026, the digital yuan has officially shifted from being a ‘digital cash’ substitute to ‘digital deposit money.’
| Feature | New e-CNY Framework (Effective Jan 2026) |
| Interest Payments | Commercial banks are now permitted to pay interest on e-CNY balances. |
| Legal Status | Classified as bank deposit liabilities; integrated into asset-liability management. |
| Consumer Safety | Fully protected under China’s national deposit insurance system. |
| Adoption Strategy | Incentivized through commercial banks to compete with private payment giants. |
This change is meant to increase adoption. By late 2025, there were 3.48 billion transactions worth 16.7 trillion yuan. The e-CNY is now positioned as a direct, interest-earning alternative to banned stablecoins.
A Global Divide: China’s Ban vs. The U.S. GENIUS Act
China’s strict approach is very different from the United States. After the GENIUS Act of 2025, the U.S. created a federal framework for ‘payment stablecoins,’ giving the sector legal certainty and leading to a record-breaking year.
- Record Volumes: Global stablecoin transaction volume surged 72% in 2025, reaching a staggering $33 trillion.
- Market Leaders: USDC dominated transaction flows with $18.3 trillion, while Tether (USDT) maintained the largest market capitalization at $187 billion.
- Regulatory Divergence: While the U.S. integrates stablecoins into its financial infrastructure via the GENIUS Act, China is centralizing all digital liquidity into the e-CNY.
“The Beijing crypto ban rule applies across all RMB-related markets… to keep speculative crypto outside the formal financial system while actively promoting the usage of e-CNY.” — Winston Ma, NYU Law Scholar.
For traders and institutional investors, China’s new policy means the yuan is now permanently separated from the decentralized finance (DeFi) ecosystem. While global liquidity for USD-pegged assets is at record highs, the renminbi’s future is now closely linked to the PBOC’s digital system.
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