China broadens its crackdown on cryptocurrencies — expands ban to include real-world asset tokenization, crypto ads, and providing network traffic for crypto activities

The People’s Bank of China (PBoC) just released a new circular expanding the current ban on cryptocurrencies and other related technologies in the country. China’s central banking institution [machine translated] broadened the 2021 restrictions to include real-world asset (RWA) tokenization, even including offshore tokenization of domestic assets and rights, unless approved by a regulated body. Aside from the PBoC, seven other agencies signed the announcement, including the Ministry of Industry and Information Technology (MIIT), which oversees China’s telecommunications and internet infrastructure.

The new circular also banned internet providers from promoting, hosting, or even providing cryptocurrency and RWA traffic. “Internet companies must not provide services such as online business venues, commercial displays, marketing promotions, or paid traffic‑diversion for activities related to virtual currencies or real‑world asset tokenization. When they discover clues indicating illegal or non‑compliant activities, they must promptly report them to the relevant authorities and provide technical support and assistance for related investigations,” the document said. “Cyberspace, telecommunications, and public security authorities shall, based on leads transferred by financial regulatory departments, promptly shut down and handle websites, mobile applications (including mini‑programs), and public accounts that engage in virtual‑currency‑related or real‑world‑asset‑tokenization‑related business activities, in accordance with the law.”

More importantly, the new document now explicitly lists multiple agencies, including PBoC, MIIT, and the Ministry of Public Security, which is China’s primary law enforcement agency, to coordinate with each other in the enforcement of this circular. It also noted that it will “crack down on fraud, money laundering, illegal business operations, pyramid schemes, illegal fundraising, and other crimes involving virtual currencies or real-world asset tokenization” and that anyone investing in virtual currencies or RWA tokens will not enjoy civil legal protections.

It seems that the Chinese central government made this move as some users are taking advantage of loopholes to use cryptocurrencies and RWA tokens despite the earlier bans. This update to the 2021 circular tightens the noose around blockchain technology in China, helping the state keep tighter control on the inflow and outflow of money around its borders.

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