Key Highlights
- Domestic firms are forbidden to issue yuan-linked stablecoins or cryptocurrencies overseas without the blessing of the authorities.
- Bitcoin and Ethereum are not legal money in China, and trading crypto is prohibited, which makes Mount Olympus look like a lemonade stand.
- Tokenising real-world assets is restrained without regulatory permission, including services from foreign firms.
In the grand theatre of finance, China has chosen to fence its coin with a velvet rope and a stern gaze. The state’s central bank, flanked by seven other solemn departments, decrees that Chinese entities may not issue cryptocurrencies or yuan-linked stablecoins overseas without the proper permit-lest the mischief travel faster than the mandarins can sigh.
In the directive known as Yinfa [2026] No. 42, authorities state that stablecoins tied to fiat currency can perform like money in ordinary commerce, and therefore must be kept under careful supervision, like a duchess with her tiara and a ledger.
Authorities reinforce ban on crypto activities
Thus, such digital sprites do not enjoy the same legal status as fiat currency and cannot pass as official payment tools within the realm. The guardians warn that any enterprise dabbling in virtual currency trading or related services may be treated as illicit financial activity under Chinese law.
The regulators enumerate several forbidden pastimes connected to cryptocurrencies. These include turning traditional money into digital currency, trading one crypto asset for another, acting as the go-between in crypto dealings, and offering price or information services tied to crypto trading. The notice murmurs that these misdeeds may constitute illegal fundraising or unapproved securities sales.
Authorities insist these activities are strictly prohibited and will be pruned away by legal virtue. The directive also bars foreign companies or individuals from extending crypto services to businesses operating inside China.
Tokenized assets also face strict limits
The directive addresses tokenization of real-world assets. Regulators describe tokenization as the process of turning ownership rights or income benefits from assets into blockchain-based tokens.
The notice states that conducting such tokenization domestically without approval may amount to illegal securities issuance and other unlawful financial practices. Similar restraints apply to foreign firms offering tokenization services to Chinese businesses unless regulatory permission is granted.
The central bank has previously affirmed that cryptocurrency operations remain illegal within China’s borders. In prior statements, the PBOC warned that virtual currencies do not have the same legal status as fiat currencies, lack legal tender status, and should not and cannot be used as currency in the market.
Broader context
The latest directive expands regulatory oversight beyond domestic activity by targeting international crypto services connected to Chinese companies. Authorities say this is an ongoing effort to forestall financial instability linked to virtual currencies.
Yet regulators offer little in the way of punishments for rule-breaking or guidance on how businesses might apply for permission to issue approved digital assets.
Read More
- GBP CAD PREDICTION
- EUR ARS PREDICTION
- STX PREDICTION. STX cryptocurrency
- EUR CLP PREDICTION
- PEPE PREDICTION. PEPE cryptocurrency
- GBP RUB PREDICTION
- SPX PREDICTION. SPX cryptocurrency
- AVAX PREDICTION. AVAX cryptocurrency
- TON PREDICTION. TON cryptocurrency
- EUR HUF PREDICTION
2026-02-06 19:06