Chinese authorities have imposed a ban on unauthorized yuan-linked stablecoins and introduced strict regulations on the tokenization of real-world assets. This move aims to stabilize the financial system and prevent illegal activities such as fraud and money laundering. Stablecoins, digital currencies pegged to stable assets like the US dollar, euro, or yuan, are now subject to tighter restrictions, adding to the existing stringent crypto regulations in China. The government has declared unauthorized yuan stablecoins illegal due to their potential risks to financial stability. Additionally, tokenization of assets such as land and property is being closely monitored and limited to reduce opacity and risks within the financial sector. As the world’s second-largest economy, China’s policy shift is expected to significantly impact both domestic and international cryptocurrency markets. The legal and financial status of cryptocurrencies in China will become more constrained, compelling investors to seek alternative options. This development may lead to increased volatility in global crypto prices and affect blockchain technology growth in China. Meanwhile, China continues to promote its central bank digital currency (CBDC), which may gain further prominence amid these new restrictions.
Source: decrypt
