China’s leading financial industry associations have issued a joint warning that real-world asset tokenization, or RWA, will be banned as a financial activity. The statement notes that even sponsors in the United States could face criminal charges. It defines RWA as the issuance of tokens or similar securitized rights and obligations used to conduct financing and trading activities.
The authorities say there is no legal basis for RWA projects in China and have not approved any RWA tokenization activities. They warn that RWA tokenization carries risks such as asset fraud, operational failure, and speculative excess. Token issuance, trading structures, and profit distribution related to RWA are categorized as prohibited activities.
The industry groups point out that criminals have used stablecoins, worthless tokens, RWA tokens, and mining as vehicles for illegal fundraising and multi-level schemes. They also warn that even employees helping overseas crypto or RWA token services could bear legal liability if the company is headquartered on the mainland. Consequently, mainland China’s Web3 ecosystem centered on RWA is effectively ended, with regulators declaring the dispute over regulatory uncertainty resolved.
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