Major Chinese financial associations are reclassifying real-world asset tokens (RWA) as a “risky” business model, a sign of tighter digital asset regulation, Cointelegraph reported citing Wu Blockchain.
The Asset Management Association of China, the National Internet Finance Association of China, the China Banking Association, the Securities Association of China, the China Futures Association, the China Association for Public Companies, and the China Payment and Clearing Association no longer consider RWA tokens a “new technology” and have classified them as illegal activity along with stablecoins, air coins (tokens with no real value) and mining, Cointelegraph reported.
According to the report, the associations said RWA involves fundraising and trading through tokens or similar rights and debt certificates and carries multiple risks, including fraudulent assets, operational failure and speculative overhyping. They stressed that “to date, there has been no real-world asset token activity approved by China’s financial authorities.”
The move defines real-world asset tokens as financial and trading activities prohibited under Chinese law and increases the likelihood of regulatory enforcement action, Cointelegraph reported.
Chi-kyu Hwang
delight@d-today.co.kr