Chinese Regulators Issue Warning on Virtual Currency Risks, RWA Future Uncertain
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Risk-on assets face renewed scrutiny as Chinese regulators tighten virtual currency oversight. On December 5, seven key associations issued a warning against illegal virtual currency activities, following a November 28 joint crackdown by 13 government departments. The move casts doubt on real-world asset tokenization (RWA), particularly as regulators have yet to approve any such efforts. Legal experts stress that public tokenization risks falling under illegal fundraising or unauthorized securities. Financial institutions are barred from supporting these initiatives. Offshore markets like Hong Kong and Singapore may offer alternatives, but compliance with Countering the Financing of Terrorism and other regulations remains a hurdle. Chinese entities seeking to move assets abroad must proceed carefully, as legal challenges persist.
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