China has issued a fresh warning that puts real-world asset (RWA) tokenization firmly in the danger zone. According to an article compiled by Wu Blockchain, Chinese regulators now classify RWA tokenization as illegal financial activity, not a gray-area innovation.
The warning came through a joint notice signed by seven major financial industry associations. These include groups tied to banking, securities, asset management, payments, and listed companies. When bodies at this level speak together, it usually signals serious financial risk concerns.
China Classifies RWA as Illegal Finance, Warning Both Domestic and Overseas Operators
By @mankunlaw
China’s financial industry associations issued a joint notice explicitly labeling RWA tokenization as illegal financial activity. The statement says RWA involves unauthorized… pic.twitter.com/WHVGRyvKcw
— Wu Blockchain (@WuBlockchain) January 5, 2026
China RWA Tokenization Illegal Under New Warning
For the first time, the notice names RWA tokenization directly. It places RWA alongside stablecoins, worthless tokens, and crypto mining as key examples of illegal virtual currency activity.
Regulators describe RWA tokenization as financing and trading through tokens or token-like certificates. They say these activities carry risks such as fake assets, operational failure, and market hype. Most importantly, they stress that China’s financial authorities have not approved any RWA tokenization projects.
This wording matters. It shows regulators no longer see RWA as a new technology waiting for rules. Instead, they see it as a risky business model that violates existing financial laws.
Why China Sees RWA as High Risk
The notice draws three clear red lines. First, it treats any token issuance tied to assets as fundraising. That brings it under strict securities and financial laws. Second, regulators say token structures cannot guarantee real ownership or protect investors, even in “legitimate” projects. Third, they state clearly that all current RWA projects lack legal approval.
The document also links RWA to crimes like illegal fundraising, unapproved securities issuance, and illegal futures trading. These are serious offenses under Chinese law.
Impact on Crypto Projects and Service Providers
The warning goes beyond project teams. It says anyone who “knows or should know” they are supporting RWA activity can be held responsible. This includes developers, marketers, consultants, and promoters, even if the project is registered overseas.
In simple terms, China has shut the door on RWA. For crypto builders, the message is clear: RWA has no legal future inside China, and any China-based connection now carries real risk.
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