In a significant regulatory shift, major Chinese financial industry associations have issued a risk warning regarding the tokenization of real-world assets (RWA), categorizing it as illegal or high-risk. This development, which emerged in early January 2026, is poised to reshape the landscape of crypto fundraising in the region, as the source reports that many projects may face increased scrutiny and potential legal challenges moving forward.
Warning on Speculative Fundraising Practices
The warning aims to curb speculative fundraising practices and mitigate the risk of capital flight, effectively reclassifying tokenization from a tool of innovation to a potential fundraising hazard. This reclassification is expected to have far-reaching consequences for market sentiment, as investors reassess the viability of RWA tokenization in light of the new regulatory stance.
Impact on Liquidity in the Asia-Facing Crypto Market
As a result, liquidity across the Asia-facing crypto market may be impacted, with participants likely to adopt a more cautious approach. The move reflects a broader trend among regulators in the region to tighten oversight on cryptocurrency activities, signaling a shift towards more stringent compliance measures in the financial sector.
Recent developments in China regarding the regulation of tokenization have raised concerns about the broader implications for the crypto market. Meanwhile, Southeast Asia has been identified as a hub for crypto-related money laundering activities, as detailed in the report available here.
