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BEIJING: China vowed to further tighten its crackdown on virtual currencies on Friday and banned unauthorised offshore issuance of yuan-pegged stablecoins.<\/strong><\/p>\n Authorities will also strictly vet offshore issuance of tokens backed by Chinese onshore assets, according to a notice published on the central bank\u2019s website.<\/p>\n Although the statement largely reiterates Beijing\u2019s existing ban on cryptocurrency, some are encouraged by signs that China is setting up a legal framework for the real-world asset (RWA) tokenisation business.<\/p>\n \u201cThe biggest breakthrough is a clear separation between virtual currencies and RWA,\u201d said Louis Wan, CEO of Unified Labs.<\/p>\n \u201cVirtual currencies will still be outlawed, but RWA is being included in the regulatory system. For China\u2019s RWA business, this is a milestone.\u201d<\/p>\n Winston Ma, an adjunct professor at NYU School of Law, said that China\u2019s central bank is essentially highlighting that only its own digital yuan is legitimate, \u201cnot a patchwork of private RMB (yuan) stablecoins circulating on global crypto exchanges.\u201d<\/p>\n Beijing has long taken a tough stance on virtual currencies, but officials said recent \u201cspeculative activities\u201d posed new challenges that warranted additional measures.<\/p>\n \u201cVirtual currencies do not have the same legal status as fiat currencies,\u201d the People\u2019s Bank of China and seven other agencies said in a joint statement, adding that business activities related to virtual currencies are \u201cillegal financial activities.\u201d<\/p>\n Without official approval, \u201cdomestic entities and their controlled overseas entities are prohibited from issuing virtual currencies overseas,\u201d they said.<\/p>\n Regulators also banned domestic and foreign entities from issuing offshore stablecoins pegged to the yuan without authorization.<\/p>\n \u201cStablecoins pegged to fiat currencies effectively perform some of the functions of fiat currencies in circulation,\u201d they said.<\/p>\n The central bank also warned financial institutions against providing banking and clearing services to virtual currency-related businesses.<\/p>\n Regarding the RWA business, under which all kinds of Chinese goods are being turned into digital assets with little oversight, offshore issuance of tokens must be strictly regulated by relevant authorities, according to the notice.<\/p>\n Bitcoin fell through the key $70,000 level on Thursday. It marked its weakest performance since November 2024, when Donald Trump<\/p>\n \u201cTo some extent, this means China is allowing the issuance of offshore tokens based on onshore assets,\u201d said Alex Zuo, senior vice president of Singapore-based crypto custodian provider Cobo.<\/p>\n Previously, such a business was in a grey area.<\/p>\n \u201cNext, we need to see if there will be detailed rules for execution, and whether there will be successful cases,\u201d Zuo said.<\/p>\n<\/div>\nCENTRAL BANK ENFORCES MONOPOLY ON DIGITAL YUAN<\/h2>\n