How China’s Crackdown Changes Real-World Asset Tokenisation
Amid global digital asset innovation, China just slammed the brakes on real-world asset (RWA) tokenisation, despite rising interest worldwide. Seven major industry bodies across mainland China, including the National Internet Finance Association, issued a joint warning against unapproved RWA projects after regulatory crackdowns intensified through 2025. This move rewires the playing field by highlighting the real leverage constraint: regulatory control over asset validity and market stability. Tokenisation won’t scale without systemic trust anchored by regulators—and China just hardened that gate.
Conventional wisdom assumes digital asset tokens inherently reduce friction by passing traditional intermediaries. Yet, China’s crackdown reveals the opposite: long-term digital leverage depends first on trustable, enforceable legal frameworks. Without official buy-in, the risks of counterfeit assets and reckless speculation create false asset bubbles rather than genuine capital unlocking. This challenges the assumption that decentralization alone drives value—constraint repositioning means regulators hold the ultimate switch.
For comparison, markets in the US and Singapore have cautiously approved RWA tokenisation pilots under strict compliance regimes, using legal infrastructures to validate assets and link digital tokens to tangible economic value. These jurisdictions avoided blanket bans, instead embedding tokenisation within regulated financial ecosystems. China’s refusal to greenlight any RWA token issuance differentiates its model by locking the digital leverage behind state approval, rather than open market innovation. This is a stark contrast to the freewheeling crypto experiments elsewhere, which often traded regulatory risk for short-run growth.
This stricter stance forces RWA providers in China to rethink system fundamentals. The actual leverage now lies in winning regulatory alignment and building platforms that operate as extensions of official asset registries or credit systems. Until then, tokenisation risks remain speculative, amplifying volatility rather than unlocking stable economic leverage. China’s decision exemplifies constraint shifts driven by policy, reminiscent of larger monetary system fragilities behind the scenes.
Operators should watch this space: China’s regulatory gatekeeping resets RWA tokenisation around trust and state integration, not just technology. This implies a bifurcation where tokenisation systems tied to government infrastructure will scale, while those aiming for unregulated leverage will falter. Similar emerging markets that prioritize stability over innovation can replicate this model, turning regulatory compliance into a moat, not a hurdle. In digital assets, trust is the real leverage multiplier—and China just centralized the keys.
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Frequently Asked Questions
What is real-world asset (RWA) tokenisation?
Real-world asset tokenisation is the process of creating digital tokens that represent ownership of tangible assets like real estate, commodities, or equities, bridging traditional assets with blockchain technology.
Why did China crack down on RWA tokenisation projects?
China’s seven major industry bodies, including the National Internet Finance Association, issued a joint warning in 2025 against unapproved RWA projects to enforce regulatory control over asset validity and market stability, aiming to prevent counterfeit assets and speculative bubbles.
How does China’s approach to RWA tokenisation differ from that of the US and Singapore?
The US and Singapore have cautiously approved RWA tokenisation pilots under strict compliance, embedding tokenisation within regulated ecosystems. In contrast, China has refused to greenlight any RWA token issuance, requiring state approval and effectively centralizing control over digital leverage.
What are the risks of RWA tokenisation without regulatory approval?
Without regulatory alignment, RWA tokenisation risks include the creation of counterfeit assets, reckless speculation, and false asset bubbles that increase volatility rather than unlocking stable economic leverage.
How does China's crackdown affect global digital asset innovation?
China’s stringent regulatory gatekeeping prioritizes trust and official integration over innovation alone, reshaping the tokenisation landscape and influencing other emerging markets to adopt stability-focused compliance models.
What role do regulators play in scaling RWA tokenisation?
Regulators anchor systemic trust by validating asset authenticity and enforcing legal frameworks; without their buy-in, tokenisation cannot scale sustainably, as seen in China’s tightened controls and contrasting counterparts like the US.
Can emerging markets replicate China’s model for RWA tokenisation?
Yes, emerging markets prioritizing market stability over open innovation can replicate China’s compliance-centric model, using regulatory frameworks as a moat to ensure trusted, scalable asset tokenisation platforms.
What is the 'real leverage' in digital assets according to the article?
The article states that trust is the real leverage multiplier in digital assets, centralized by China’s regulatory measures, which emphasize state approval and systemic stability over decentralized technology alone.