China Moves to Tighten Oversight of Crypto and Tokenized Assets

China's central bank has issued a new regulatory circular expanding existing restrictions on cryptocurrencies and related technologies, signaling a further tightening of oversight rather than a fundamental policy shift.

Released late last week by the People's Bank of China (PBOC) and co-signed by seven government agencies—including the Ministry of Industry and Information Technology (MIIT)—the document builds on measures introduced in 2021. Notably, it explicitly extends regulatory controls to the tokenization of real-world assets (RWA), including offshore tokenization of domestic assets and property rights without regulatory approval.

Under the new circular, internet service providers and online platforms are prohibited not only from promoting or hosting crypto-related services, but also from providing network access, marketing support, paid promotion, or technical assistance to activities involving cryptocurrencies or RWA.

The document places additional compliance obligations on internet companies, requiring them to report suspected illegal or non-compliant activities and cooperate with investigations. Authorities responsible for cyberspace administration, telecommunications, and public security are instructed to promptly block websites, mobile applications—including mini-programs—and public accounts linked to crypto or tokenized asset activities.

The PBOC, MIIT, and the Ministry of Public Security emphasized coordinated enforcement to curb risks associated with fraud, money laundering, illegal fundraising, pyramid schemes, and unlicensed business operations involving digital assets.

The circular also reiterates that investors engaging in virtual currency or tokenized asset transactions are not entitled to civil law protection, effectively placing all associated losses at the investor's own risk.

Regulatory analysts suggest the move reflects concerns that some market participants continued to engage in crypto and RWA activities by exploiting gaps in earlier rules. By refining and expanding the 2021 framework, regulators are further narrowing the scope for unapproved blockchain-based financial activity.

Taken together, the measures reinforce China's long-standing approach of distinguishing between state-supervised blockchain applications and unauthorized forms of crypto-related economic activity, while maintaining tight control over financial stability and cross-border capital flows.