TechFlow News, February 22: Caixin published an article titled “Strict Regulation of Offshore RWAs.” Zeng Gang, Director and Chief Expert of the Shanghai Financial Development and Research Laboratory, stated that the “Circular No. 42” jointly issued by eight ministries adopts a regulatory framework of “prohibition within China and strict oversight overseas,” distinguishing for the first time RWA tokens from virtual currencies. The China Securities Regulatory Commission (CSRC) has designated “tokenized asset-backed securities” as the first operational RWA category, establishing a concrete pathway for compliant offshore issuance by domestic enterprises. Regulators neither dismiss the potential value of RWA tokens as a novel financing instrument nor relax risk prevention measures. Circular No. 42 emphasizes the use of “cryptographic technologies and distributed ledger or similar technologies,” without mandating absolute decentralization. Its core principles are: (1) the entire offshore issuance process must ensure that domestic entities do not engage in token trading; (2) funds entering China must flow through compliant cross-border investment and foreign exchange management channels; and (3) a post-issuance event reporting mechanism must be established to ensure timely reporting of material matters to the CSRC.
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