China Declares RWA Tokenization Illegal, Citing Financial Risks
China's financial regulators have issued a joint notice categorizing real-world asset (RWA) tokenization as illegal financial activity. The National Internet Finance Association of China, alongside six other major financial industry associations, condemned the practice as unauthorized and risky.
Tokenized asset projects involving financing or trading through digital certificates now fall under China's Securities Law prohibitions. Regulators highlighted dangers including asset fraud, operational failures, and speculative trading schemes exploiting the RWA narrative.
All existing RWA-related services, platforms, and intermediaries operating in China currently lack regulatory approval. The notice specifically warns against yield-bearing arrangements and secondary trading of tokenized assets.
