In a significant escalation of its regulatory stance, China has intensified its crackdown on cryptocurrencies by declaring all Real World Asset (RWA) tokenization activities illegal. According to the official information, this announcement, made by seven major financial industry associations on December 5, 2022, underscores the government's ongoing efforts to control the burgeoning crypto market.
Joint Warning from Associations
The joint warning from these associations comes as part of a broader campaign against cryptocurrencies, which has already seen the prohibition of Initial Coin Offerings (ICOs) and domestic crypto exchanges. The People's Bank of China reiterated that virtual currencies lack the legal status of fiat currencies, emphasizing that they cannot be utilized in the market.
Government Concerns and Regulatory Actions
This latest move reflects the government's deep-seated concerns regarding potential risks associated with cryptocurrencies, including:
- the proliferation of fake assets
- the threat of capital flight
By tightening regulations on RWA tokenization, China is taking a decisive step to safeguard its financial system and maintain control over emerging financial technologies.
In light of China's recent crackdown on cryptocurrency activities, President Trump's comments have reignited interest in XRP, prompting investors to reassess their strategies. For more details, see XRP debate.
