China Securities Regulatory Commission urges brokerages to pause RWA business

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CSRC targets asset tokenization, reflecting China’s cautious stance on financial innovation and blockchain use

China’s securities watchdog told some Chinese brokerages to halt their real-world assets business in Hong Kong, according to Reuters.

The China Securities Regulatory Commission’s move affects major securities companies and financial institutions involved in tokenizing tangible assets like real estate and commodities on blockchain platforms.

The regulatory action continues China’s cautious approach to financial innovation. The country has implemented stringent financial regulations in recent years, including cryptocurrency trading bans since 2021, while still encouraging blockchain technology for non-crypto applications.

The CSRC frequently intervenes to prevent market volatility, such as restricting short-selling or equity sales during periods of stress. In 2024, the commission took similar stabilizing actions across stock exchanges.

China has paused or restricted new financial products multiple times since 2017 to align with national priorities like risk management and capital control. This pattern reflects the government’s measured stance toward asset tokenization and emerging financial technologies.

Globally, the RWA sector has grown rapidly, with tokenized assets reaching over $28 billion in market value. The growth has been driven by adoption in decentralized finance platforms, though China’s regulatory pauses could limit domestic integration compared to markets like the US and Europe.