China signals tougher rules on putting real-world assets on a blockchain

China's State Council has said it will strengthen regulation of the tokenisation of real world assets, in a financial work report just made public.

What the report says

The measure sits in the section on preventing financial risk, under illegal financial activity, not under financial innovation or opening up. It appears beside plans to improve the rules for virtual currencies, to analyse leads on underground banks linked to them, and to set up a routine, full-chain clean-up of virtual currency mining. The report names no new rule, no penalty and no date for enforcement.

How it fits earlier rules

The wording follows Notice No. 42, issued on 6 February 2026 by the People's Bank of China and the China Securities Regulatory Commission together with six other bodies. Under that notice, tokenising real world assets inside mainland China is unlawful, and offshore routes need approval and a filing with the securities regulator. Nine months on, the State Council report shows that stance is still in force and that tokenisation is grouped with the activities Beijing wants to suppress.

UK founders and investors

Hong Kong is building a regulated route for tokenised products, including the round-the-clock tokenised deposits that went live there. A UK company that sells tokens to buyers in mainland China, or relies on a mainland team or platform, has a clearer reason to check its position before it raises money. The same question applies to investors in funds with Asian distribution.

The UK is taking the opposite emphasis for now. The Bank of England's supervised sandbox has cleared three firms to run live tokenised markets, and the Bank has opened a consultation on tokenised collateral. For founders choosing where to issue, and which investors to take money from, the gap between a supervised test in London and a restriction in Beijing is a due diligence point.

The counter argument

The report is a list of intentions. It adds no rule to what the February notice already did, and offshore routes remain possible with approval and a filing. Detail is likely to come from the People's Bank of China or the securities regulator before anything changes in practice. Founders with China exposure should take legal advice, as this is not legal advice.

Key takeaways

• China's State Council has listed stronger regulation of real world asset tokenisation among its measures against illegal financial activity.

• No new rule or enforcement date was given, so Notice No. 42 of February 2026 remains the operative stance.

• UK founders who sell tokens into mainland China, or use mainland partners, should check their position before raising.