Chinese Associations Declare RWA Tokenization Illegal

Seven major Chinese financial industry associations issued a joint notice on Monday declaring real-world asset (RWA) tokenization an illegal financial activity, aligning it with prohibited practices such as stablecoin issuance, cryptocurrency trading, and mining. The announcement, coordinated across banking, securities, asset management, futures, payments, and listed companies sectors, eliminates any legal basis for such operations under existing laws and extends liability to the full spectrum of supporting services.

The notice, signed by the China Internet Finance Association, China Banking Association, China Securities Association, China Asset Management Association, China Futures Association, China Association of Listed Companies, and China Payment and Clearing Association, defines RWA tokenization as financing and trading conducted through the issuance of tokens or similar rights and debt instruments. Authorities highlighted associated risks, including fictitious assets, operational failures, and speculative trading, which they said introduce uncontrollable spillovers even in projects claiming transparency or genuine collateral. No Chinese financial regulators have approved...