OFFICIAL: CHINESE RWA GAME RULES CONFIRM THAT RWA WILL NO LONGER BE A GREY AREA

AUTHOR: SPINACH SPINACH ON RWA

 

On 6 February 2026, a day worth remembering。

Today, the People ' s Bank of China, in association with the National Commission for Development and Reform, the Ministry of Industry and Communications, the Ministry of Public Security, the General Directorate of Market Supervision, the General Directorate of Financial Supervision, the CVM and the eight departments of the Foreign Exchange Office, issued a Circular on Further Prevention and Management of Risks Related to Virtual Currency (Silver Issue No. 2026-42). At the same time, a more practical annex, the Guidance for the Regulation of Foreign Issued Assets in Support of Securities, was produced。

it's not a simple ban. if you're still in the "ban crypto again", then you might have completely misread the document。

Let me take these two documents apart in human language。

In 2021, eight ministries issued a similar document — Silver (2021) 237, known as the industry's "924 Notice". That document set the tone for China's "full containment" of the virtual currency. Five years later, in the last article, article 42 expressly states: "The circular of the People ' s Bank of China and 10 other departments on further prevention and disposal of risks associated with virtual currency transactions (silver hair (2021] 237) has also been abolished. "

It is not simply a patch, but a systematic re-engineering of rules. So what is the greatest difference between new and old documents

ONE WORD: RWA。

THE CONCEPT OF "RWA" WAS VIRTUALLY NON-EXISTENT IN THE DOMESTIC REGULATORY CONTEXT. BUT THE 42ND ARTICLE, DEDICATED TO DEFINING AND REGULATING REAL-WORLD ASSET MONETIZATION (RWA), IS IN ITSELF A HUGE SIGNAL. – RWA WAS OFFICIALLY RECOGNIZED AS A BUSINESS MODEL AND DECIDED TO DEFINE THE RULES OF THE GAME FOR IT, RATHER THAN A BLANKET DENIAL。

Core point one: The attitude of the virtual currency remains unchanged, but the wording is more precise

ARTICLE 1, PARAGRAPH 1, OF ARTICLE 42 STATES: "THE VIRTUAL CURRENCY DOES NOT HAVE THE SAME LEGAL STATUS AS THE STATUTORY CURRENCY. "BITCOIN, TAIFENG, USDT, ETC., ARE NAMED AS "UNREMUNERATED, NOT TO BE AND NOT TO BE USED IN THE MARKET AS A CURRENCY"。

The next wording and the 924 circular are almost identical: domestic exchange of French and virtual currency, exchange of virtual currency, provision of brokering and pricing services, financing for the issuance of coins, etc., are strictly prohibited and firmly prohibited by law. The provision of virtual currency services to entities abroad is likewise prohibited。

However, there is an important addition here: "No unit or individual may issue a fixed currency peg outside the country without the consent of the authorities concerned in accordance with the law. Note that the document is "unconsented" and not "all prohibited". What does that mean? Theoretically, there is a possibility that the RMB stabilization path may exist "with the consent of the relevant authorities in accordance with the law". It's very small, but it does exist。

For virtual money investors, this is, frankly, nothing new. It's still forbidden, it's still forbidden. Digging continues, advertising continues to be blocked, and the name of the company's registration and scope of operation do not allow the words "virtual currency" or "encrypted currency" or "stabilized currency"。

CORE POINT TWO: RWA DEFINITION IS FIRST WRITTEN INTO MINISTERIAL DOCUMENTS

This is the most interesting part of article 42. Article 1, paragraph 2, of the document gives a very clear official definition:

" Real-world asset monetization refers to the conversion of ownership of assets, rights to proceeds, etc., into tokens (circulars) or other interests, bond vouchers with the characteristics of tokens (circulars) and the issuance and trading of assets using encryption and distributed books or similar technologies. "

THERE ARE SEVERAL DIMENSIONS TO THIS DEFINITION THAT DESERVE TO BE BROKEN DOWN. FIRST, IT LOCKS THE RWA TECHNOLOGY INTO "ENCRYPTED AND DISTRIBUTED BOOKS OR SIMILAR TECHNOLOGY." — IN OTHER WORDS, BLOCK CHAINS OR CLASS BLOCK CHAINS ARE NECESSARY FOR RWA. SECOND, THE MONETIZATION IS AIMED AT "OWNERSHIP, RIGHTS OF RETURN, ETC." AND COVERS A WIDE RANGE, FROM REAL ESTATE TO RECEIVABLES, FROM BONDS TO FUND SHARES, THEORETICALLY WITHIN RANGE. FINALLY, BOTH THE "ISSUES AND TRANSACTIONS" ARE REGULATED。

The real point, however, is the following:

" With the consent of the competent operational authorities, in accordance with the law, except in the case of operations carried out on the basis of a specific financial infrastructure. "

THE TRANSLATION IS THAT RWA IS NOT COMPLETELY INCAPABLE OF DOING IT IN THE COUNTRY, BUT YOU HAVE TO GET A PERMIT, AND YOU HAVE TO DO IT ON A REGULATED FINANCIAL INFRASTRUCTURE. THE EXPRESSION "SPECIFIC FINANCIAL INFRASTRUCTURE" IS VERY INTERESTING. WHAT'S A "SPECIFIC FINANCIAL INFRASTRUCTURE"? IT IS NOT CLEAR, BUT IN THE LIGHT OF CHINA ' S CURRENT PRACTICE, THE SHANGHAI DATA EXCHANGE, THE BEIJING INTERNATIONAL BIG DATA EXCHANGE, THE SHENZHEN DATA EXCHANGE, LOCAL FINANCIAL ASSET EXCHANGES AND THE DIGITAL RENMINBI INFRASTRUCTURE LED BY THE PEOPLE ' S BANK OF CHINA CAN ALL BE CANDIDATES。

IN OTHER WORDS, THE LOGIC OF 42 IS NOT "PROHIBITING RWA," BUT "RWA MUST PLAY ON MY FIELD."。

Core element three: domestic asset monetization with a formal regulatory framework

Chapter IV of document No. 42, "Obligation of strict control over the movement of subjects from the national territory abroad" is the most groundbreaking part of the document as a whole. It's not saying, "Don't go out." It's saying, "Don't go out."。

ARTICLE 14 OF THE DOCUMENT DISTINGUISHES BETWEEN THE FOLLOWING SITUATIONS: RWA, WHICH IS THE FORM OF EXTERNAL DEBT OF THE SUBJECTS IN THE TERRITORY OUTSIDE THE COUNTRY, WHICH IS UNDER THE RESPONSIBILITY OF THE COMMISSION AND THE FOREIGN EXCHANGE OFFICE; RWA, WHICH IS SECURITIZED OR EQUITY-BASED OUTSIDE THE COUNTRY ON THE BASIS OF AN INTEREST IN THE TERRITORY; AND OTHER FORMS OF RWA, WHICH IS ALSO UNDER THE RESPONSIBILITY OF THE CVM IN CONJUNCTION WITH THE RELEVANT AUTHORITIES. THE CORE PRINCIPLES ARE "THE SAME BUSINESS, THE SAME RISKS, THE SAME RULES." WHETHER YOU ARE IN HONG KONG OR SINGAPORE, AS LONG AS THE BOTTOM ASSETS ARE IN CHINA, CHINA’S REGULATION WILL FOLLOW。

WHAT DOES THAT MEAN? THE BIGGEST OBSTACLE TO THE MOVEMENT OF CHINESE ASSETS TO THE SEA THROUGH RWA TOKENS HAS BEEN NOT TECHNOLOGY, NOR IS IT A MARKET, BUT RATHER A GREY AREA OF REGULATION. MANY OF THE PROJECTERS WANTED TO DO IT, BUT NOBODY DARED TO DO IT — BECAUSE THERE WERE NO CLEAR RULES, AND IT COULD BE LEGAL OR ILLEGAL. DOCUMENT 42 FINALLY MAKES THE RULE CLEAR: YOU CAN DO IT, BUT IT MUST BE APPROVED OR FILED。

The accompanying Guidance on the Regulation of Foreign Issued Assets in Support of Securities (hereinafter referred to as " the Guidance " ) is more specific about "how to " 。

Core point four: CVM filing — specific pathways for securitization of assets

The Guide is the most relevant document, and it sets out filing rules specifically for the scenario of issuing assets abroad in support of securities。

The core processes of the Guidelines can be summarized as: internal subjects who actually control the underlying assets file with the CSRC, submit filing reports, complete distribution information from abroad, etc., and provide a complete picture of the information on the registered subjects in China, basic asset information, currency distribution programmes, etc. When the material is complete and in accordance with the requirements, the CVM carries out the filing procedure and makes it public; it does not comply with the requirements and does not file。

Please be advised, this is "filed", not "approved". Although the CVM may "require, as appropriate, the views of the relevant State Department authorities and industry regulators", the overall design of the system is a filing system, which is much more relaxed than the approval system. This suggests that the attitude of the Supervisory Body towards the offshore use of assets for securitization purposes is cautiously open — not to open a green light for you, but to weld the door to death。

At the same time, the Guidelines establish a clear negative list of assets that are prohibited by law from financing, that are detrimental to national security, that have a criminal record of the controlling party, that are being investigated, that have a major title dispute over the underlying asset, and that are prohibited from the negative list of securitization of assets within the country。

THESE LIMITATIONS ARE HIGHLY CONSISTENT WITH EXISTING DOMESTIC ASSET SECURITIZATION, AND THE REGULATORY LOGIC OF LISTINGS OUTSIDE THE ENTERPRISE — THE REGULATORY HIERARCHY CLEARLY INCORPORATES RWA MONETIZATION INTO THE EXISTING SECURITIES REGULATORY FRAMEWORK, RATHER THAN CREATING A SEPARATE STOVE。

Core point five: The role of financial institutions is strictly defined

THE REQUIREMENTS FOR FINANCIAL INSTITUTIONS UNDER ARTICLE 6 OF ARTICLE 42 ARE CLEAR: FOR VIRTUAL CURRENCY-RELATED OPERATIONS, SERVICES SUCH AS ACCOUNT OPENING, TRANSFER OF FUNDS, SETTLEMENT OF ACCOUNTS ARE NOT PERMITTED; FOR RWA OPERATIONS, THE CONDITION IS "UNCONSENSUAL" — THAT IS, IN THE CASE OF REGISTERED AND APPROVED RWA-COMPLIANT OPERATIONS, THE FINANCIAL INSTITUTION IS PERMITTED TO PROVIDE SUCH SERVICES AS TRUSTEESHIP, SETTLEMENT, ETC。

THIS IS IMPORTANT FOR THE WHOLE INDUSTRY. THE RWA PROJECT HAS TO BE ROBUST, WITHOUT THE INVOLVEMENT OF TRADITIONAL FINANCIAL INSTITUTIONS — TRUST BANKS, CLEARING HOUSES, PAYMENT CORRIDORS — ALL OF WHICH EXIST AT THE INFRASTRUCTURE LEVEL. PAPER NO. 42 REMOVES COMPLIANCE RWA FROM THE NEGATIVE LABEL OF "VIRTUAL CURRENCY" AND CLEARS UP POLICY BARRIERS TO THE PARTICIPATION OF FINANCIAL INSTITUTIONS IN RWA OPERATIONS。

ARTICLE 15 OF THE DOCUMENT FURTHER PROVIDES THAT THE PROVISION OF RWA SERVICES ABROAD BY SUBSIDIARIES AND BRANCHES OF FINANCIAL INSTITUTIONS IN THE COUNTRY SHALL BE "LEGALLY PRUDENT" AND REQUIRE THE PRESENCE OF PROFESSIONALS AND SYSTEMS TO IMPLEMENT THE REQUIREMENTS OF KYC, PROPER MANAGEMENT, ANTI-MONEY-LAUNDERING, ETC., AS WELL AS TO BE INCORPORATED INTO THE SYSTEM OF WIND CONTROL OF DOMESTIC FINANCIAL INSTITUTIONS. THIS IS EQUIVALENT TO INFORMING THE OVERSEAS BRANCHES OF THE CHINESE INSTITUTIONS: YOU CAN DO THIS BUSINESS, BUT NOT "REGULATED ARBITRAGE" OVERSEAS TO INTEGRATE CORPORATE MANAGEMENT。

How do we understand the overall signal of both documents

When you read 42 together with the Guide, you find a very clear regulatory logic:

FIRST, VIRTUAL CURRENCY AND RWA WERE EXPLICITLY CUT。THE VIRTUAL CURRENCY CONTINUES TO BE HIT HARD, AND THIS ATTITUDE HAS NOT WAVERED SINCE 2017. HOWEVER, RWA IS NO LONGER BROADLY CLASSIFIED AS A "VIRTUAL CURRENCY-RELATED BUSINESS" BUT IS TREATED AS A FORM OF FINANCIAL BUSINESS THAT CAN EXIST WITHIN A REGULATORY FRAMEWORK。

SECOND, THE RWA IN-COUNTRY TAKES THE "CONCESSION" MODEL。RWA WITHIN THE COUNTRY MUST BE CARRIED OUT ON A REGULATED "SPECIFIED FINANCIAL INFRASTRUCTURE", WITHOUT A LICENSE OR PERMIT, AND BE CONSIDERED AN ILLEGAL FINANCIAL ACTIVITY. THIS GOES HAND IN HAND WITH CHINA'S CONSISTENT REGULATORY APPROACH TO FINANCIAL OPERATIONS — FINANCE IS A FRANCHISING INDUSTRY。

Thirdly, the domestic offshore monetization of assets is recorded。THIS IS THE GREATEST INCREMENTAL INFORMATION. IT PROVIDES A COMPLIANCE PATH FOR HIGH-QUALITY ASSETS IN CHINA TO ACCESS GLOBAL CAPITAL MARKETS VIA RWA. AS THE PRIMARY CUSTODIAN, THE CVM HAS A REASONABLE THRESHOLD FOR FILING RATHER THAN APPROVING。

FOURTHLY, THE PARTICIPATION OF FINANCIAL INSTITUTIONS IN RWA COMPLIANCE OPERATIONS IS EXPLICITLY AUTHORIZED。THIS PROVIDES AN INSTITUTIONAL BASIS FOR THE CONSTRUCTION OF THE ECOSYSTEM AS A WHOLE. WITHOUT THE INVOLVEMENT OF BANKS AND CLEARING HOUSES, RWA IS SIMPLY AN AEROPLANE。

FROM A MORE MACRO POINT OF VIEW, THE INTRODUCTION OF ARTICLE 42 AND THE GUIDE MARKED A FORMAL SHIFT IN CHINA'S REGULATION OF ENCRYPTED ASSETS FROM "ONE-SIZE-FITS-ALL BLOCK" TO "CLASSIFICATION". THE VIRTUAL CURRENCY SHOULD CONTINUE TO FIGHT, BUT THE RWA — ESPECIALLY THE RWA OPERATION, WHICH IS SUPPORTED BY REAL ASSETS, HAS A COMPLIANCE STRUCTURE AND HAS A REGULATORY RECORD — SHOULD BE REMOVED FROM ITS TARGETS AND INTEGRATED INTO THE FORMAL FINANCIAL REGULATORY SYSTEM。

- it's not china hugging crypto, it's china hugging tokenism in its own way。

The rules of the game are finally clear for institutional investors and projecters who have been watching. There is a compliance path, a negative list, a regulatory body and a filing process. The other question is, are you ready