China intensifies control over virtual currencies with comprehensive regulations

MetaverseLandlord · 2026-02-27T04:18:46+00:00

In February 2026, China’s PBOC and seven other regulatory bodies introduced new regulations to address risks associated with virtual currencies and digital assets. Key aspects include restricting the tokenization of real-world assets unless specifically approved and classifying stablecoins as legal currency, raising foreign exchange concerns. Oversight is shared among multiple regulators to ensure comprehensive monitoring.

MetaverseLandlord

2026-02-27 04:18:46

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In early February 2026, the People’s Bank of China (PBOC), along with seven other regulatory agencies, issued a new regulatory framework to address risks related to virtual currencies and digital assets. This move reflects China’s commitment to strengthening oversight of the rapidly growing virtual currency sector. According to NS3.AI, this is a significant step to maintain financial stability and prevent potential risks.

Real Asset Tokenization (RWA) - Prohibited unless specifically approved

The key highlight of the regulation is the restriction on tokenizing real assets (RWA) in China. Under the new legal framework, activities involving RWA are completely prohibited unless explicitly approved by relevant authorities. For offshore RWAs, the regulations impose strict compliance standards and transparency requirements. The goal is to ensure transparency and risk control in all asset tokenization activities.

Stablecoins considered as legal tender: Concerns over foreign exchange

Another important aspect of the regulation is the classification of stablecoins. The new rules treat stablecoins as having characteristics similar to legal currency, raising significant concerns about foreign exchange risks. Chinese authorities believe stablecoins could become channels for illicit capital transfers if not tightly regulated. Therefore, stablecoins will need to comply with regulations similar to traditional financial instruments.

Centralized oversight from multiple regulatory agencies

The oversight framework is designed as a collaborative effort among Chinese regulatory bodies. Control responsibilities are shared between the PBOC and other agencies, ensuring comprehensive and effective supervision. This cooperative model demonstrates China’s determination to build a professional and responsible virtual currency management system.

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