China’s financial associations have jointly declared real-world asset tokenization (RWA) illegal under current national regulations. A new risk warning issued by seven major industry bodies confirmed RWA falls within the category of prohibited virtual currency activities. The statement brings clarity to regulatory treatment and signals a full enforcement posture against RWA in both domestic and offshore operations.
Cross-Industry Warning Identifies RWA as Unlawful Activity
The notice was co-signed by seven associations, including the Internet Finance Association, the Securities Association, and the Payment & Clearing Association. The document referred to RWA as a financing and trading activity, placing it alongside stablecoins and aircoins. Authorities stated that no RWA projects are approved under Chinese law and labeled the model as high risk.
The warning defined RWA as issuing tokens or debt-like certificates linked to physical assets for trading or fundraising. Regulators cited risks of fraud, operational failure, and speculation, saying compliance mechanisms cannot eliminate these risks. The statement explicitly declared, “No real-world asset tokenization activities have been approved by China’s financial regulatory authorities.”
Authorities made it clear that this is not a temporary measure or a waiting period. The document ruled out future regulatory filings or approvals for RWA projects operating within the country — the notice categorized such activities as violating the Securities Law and existing financial prohibitions.
Legal Implications Extend to Platforms and Service Providers
The statement identified three legal concerns associated with RWA models: illegal fundraising, unauthorized securities issuance, and unlawful futures business. These fall under defined violations in Chinese law and align with prior enforcement cases and rulings. The document specified that even technically structured or offshore models would not be exempt from penalties.
It warned that any project issuing RWA tokens and distributing them to the public could trigger criminal fundraising charges. Those offering trading platforms or securities-like products without licenses could face charges for illegal issuance. If token activity involves leverage or speculation, regulators may treat it as illegal futures trading.
The warning also addressed promotional and intermediary roles, citing liability for domestic entities supporting RWA services knowingly or unknowingly. Legal responsibility applies not just to token issuers but also to tech firms, consultants, marketers, and payment providers. The phrase “knowingly or should have known” establishes broad legal accountability.
No Safe Harbor for Offshore Entities with Mainland Operations
Authorities targeted the model of offshore-registered entities operating through mainland teams. The document confirmed that even one domestic employee supporting an RWA project could trigger legal risk. This concludes the common Web3 strategy of utilizing offshore incorporation to circumvent domestic regulations.
The enforcement scope includes infrastructure providers, development teams, auditors, KOLs, and promotional channels like WeChat or Telegram. The document emphasized that RWA activity supported by Chinese residents constitutes a local financial business and must comply with Chinese law. It denied the notion that pure tech service providers are immune from liability.
This eliminates the legal basis for any China-linked RWA ecosystem, including token issuers and third-party vendors. Teams hoping to continue such business must relocate completely outside of China with full structural independence. The government’s position leaves no space for gradual compliance or conditional experimentation.
Document Signals End of RWA Viability in China
The warning emphasized that the risks of RWA outweigh its technological benefits. It did not mention sandboxing, pilot programs, or flexible oversight for future trials. The stance closes the door on any regulatory accommodation or future inclusion of tokenized assets. The document further noted that criminals utilize RWA claims to promote fundraising schemes and fraudulent operations.
Projects still recruiting community partners or representatives under the RWA label now fall within illegal activity definitions. This includes any solicitation through social platforms or messaging groups. Attorney Honglin, who had spoken about RWA scams in past broadcasts, confirmed the sudden scope and seriousness of the new warning. He noted the participation of seven top-level associations represents a rare and coordinated enforcement consensus.
The statement frames RWA as a clear financial threat alongside previously banned crypto activities. Service providers are urged to recognize that technical structure does not shield them from legal exposure. Regulators reject arguments around compliance layers or asset transparency if tokenization remains the core model. Authorities have prioritized risk containment over technological innovation in their enforcement roadmap.
