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Friday Dec 5 2025 11:10
2 min
According to a notice from the China Futures Association, six major Chinese industry associations, including the China Internet Finance Association and the China Banking Association, have jointly issued a risk warning regarding virtual currencies and real-world asset tokenization. This warning aims to educate the public about the inherent nature of these activities and protect investors.
The associations emphasize that virtual currencies are not legal tender issued by a monetary authority and do not have the same legal status as legal tender. Consequently, they are not authorized for circulation or use as currency within China. Furthermore, stablecoins pose significant challenges in terms of customer identification and anti-money laundering requirements, making them susceptible to money laundering, fundraising fraud, and illegal cross-border transfers.
Real-world asset tokenization, which involves issuing tokens to represent ownership of real-world assets, carries multiple risks, including the risk of fake assets, operational failure risk, and speculative hype. It's important to note that Chinese financial authorities have not approved any real-world asset tokenization activities.
Any activities involving the exchange of legal tender for virtual currencies, the issuance of real-world asset tokens, and fundraising within China are deemed illegal financial activities. These illegal activities may include illegally selling token tickets, illegally raising funds, publicly issuing securities without authorization, and illegally operating a futures business.
Overseas virtual currency and asset token service providers are prohibited from directly or indirectly providing services to residents in China. Local employees of these providers, as well as domestic institutions and individuals who knowingly provide services to them, will be held legally responsible.
The associations urge the public to exercise extreme caution regarding all forms of virtual currency and asset token activities. They emphasize the importance of staying informed about the risks associated with these activities and avoiding participation in them.
Risk Warning: This article represents only the author’s views and is provided for informational purposes only. It does not constitute investment advice, investment research, or a recommendation to trade, nor does it represent the stance of the Markets.com platform. When considering shares, indices, forex (foreign exchange), and commodities for trading and price predictions, remember that trading CFDs involves a significant degree of risk and may not be suitable for all investors. Leveraged products can result in capital loss. Past performance is not indicative of future results. Before trading, ensure you fully understand the risks involved and consider your investment objectives and level of experience. Trading cryptocurrency CFDs and spread bets is restricted for all UK retail clients.
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