China Bans All Crypto Transactions and RWA Tokenization

Edgen Crypto

·Feb 06 2026, 13:19

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Key Takeaways

China's central bank, alongside seven other government bodies, has issued a sweeping directive to completely prohibit virtual currency transactions and the tokenization of Real World Assets (RWA). The policy is expected to force Chinese investors to liquidate their holdings and severely disrupt a key area of Web3 innovation.

Eight Chinese government bodies have jointly issued a document to comprehensively ban domestic virtual currency activities.
The prohibition includes a specific ban on Real World Asset (RWA) tokenization, a critical growth sector for Web3.
The move is anticipated to trigger significant market sell-offs as Chinese investors are compelled to exit their positions.

Eight Chinese Departments Mandate Total Crypto Ban

The People's Bank of China and seven other national departments have jointly issued a document that comprehensively outlaws virtual currency transactions for domestic users. This coordinated regulatory action represents one of the country's most decisive moves to eliminate cryptocurrency activities within its borders. The directive effectively closes off avenues for Chinese investors to participate in the digital asset market, creating immense pressure for forced selling and significant disruption for exchanges with ties to mainland China.

RWA Tokenization Halted, Stifling Key Web3 Growth

The policy explicitly includes a prohibition on Real World Asset (RWA) tokenization, a burgeoning sector focused on bringing traditional assets like real estate and bonds onto the blockchain. By banning this activity, Chinese authorities are stifling what many consider a key growth driver for the next phase of Web3 development. This move cuts off a massive potential market and sends a clear signal that innovation in asset tokenization will not be permitted, likely redirecting capital and talent to more favorable jurisdictions.