Fintech and Digital Assets

Fintech in China at a glance

Fintech in China sits inside one of the most tightly drawn regulatory perimeters in the world. The basic rule is simple: any activity that looks like finance, whatever technology it uses, needs a licence from a financial regulator or must be carried out through a licensed institution. Payments, lending, wealth distribution, securities trading, insurance and credit reporting are all licensed businesses, and technology firms that support them do so as service providers to licensed institutions rather than as unregulated competitors.

Digital assets are treated very differently on either side of the Shenzhen River. In mainland China, trading, issuing and promoting virtual currencies remains prohibited, and in February 2026 eight central authorities replaced the 2021 crypto notice with a broader instrument that also captures stablecoins and real-world asset (RWA) tokenisation. In Hong Kong, by contrast, the Securities and Futures Commission (SFC) licenses virtual asset trading platforms and the Hong Kong Monetary Authority (HKMA) licenses fiat-referenced stablecoin issuers under a statute that came into operation on 1 August 2025. Most cross-border digital asset projects with a China nexus are therefore designed around Hong Kong, with careful attention to what mainland persons, assets and capital may lawfully do.

For international businesses this produces three recurring questions: whether a product needs a mainland licence at all, how to partner with licensed institutions without stepping over the line into unlicensed activity, and how mainland rules on data, foreign exchange and outbound investment apply to offshore structures that touch Chinese users or assets. For Chinese fintech groups going abroad, the questions run the other way: which licences are needed in Hong Kong, Singapore, the EU or elsewhere, and what home-country approvals and data rules follow them overseas.

Who regulates fintech in China

Following the 2023 reform of the financial regulatory system, supervision is organised around a small number of central agencies, with local financial regulatory bureaux overseeing certain local institutions such as microlenders and financing guarantee companies. Technology-specific regulators, above all the Cyberspace Administration of China (CAC), sit alongside them.

Above these agencies sits an evolving statutory framework. In June 2026 a draft Financial Law, described as the overarching law for the financial sector, was submitted to the National People's Congress Standing Committee for its first reading. If enacted, it is expected to reinforce the principle that all financial activity falls within licensed supervision.

The regulatory landscape for fintech in China, 2024 to 2026

The past three years have brought a run of instruments that reset the ground rules for most fintech business models. The table below summarises those we see as most significant for foreign and Chinese clients.

The primary texts are published by the issuing authorities; see, for example, the 2026 virtual currency notice on the CSRC website, the PBOC's 2024 implementing rules for non-bank payment institutions and the HKMA's stablecoin issuer regime page.

Mainland China and Hong Kong: two different tracks

The single most important structuring decision in a China-related digital asset project is where each element sits. Mainland rules focus on who is doing the activity and whom it reaches. Offshore entities may not provide virtual currency services to mainland users, mainland institutions may not open accounts or clear funds for such activity, and internet platforms may not advertise it. Domestic entities, and offshore entities they control, need approval or a filing before issuing tokens offshore that are linked to mainland assets or rights.

Hong Kong, meanwhile, is building a licensed market. The SFC reported twelve licensed virtual asset trading platforms by March 2026, allowed shared order books with overseas affiliates from November 2025, and has authorised tokenised money market fund classes and virtual asset spot ETFs. Legislation to license virtual asset dealers and custodians was being prepared for introduction in 2026.

Our fintech and digital assets practice areas

Each of the pages below looks at one part of the market in more detail, covering the rules, the practical issues and how cross-border projects are typically organised.

• Fintech regulation: the licensing perimeter, the main regulators and how technology firms partner with banks, insurers and securities firms without carrying on unlicensed business.
• Payments and bank card clearing: the non-bank payment regime in force since May 2024, bank card clearing licences, cross-border payments and the position of foreign-invested payment institutions.
• Web3 and virtual assets: the mainland prohibition on virtual currency business, how it was restated in 2026, the treatment of NFTs and blockchain services, and offshore structuring.
• RWA tokenisation: the domestic ban, the CSRC filing route for offshore asset-backed security tokens and the parallel roles of the NDRC and SAFE.
• Stablecoins and Hong Kong virtual asset licensing: HKMA stablecoin licences, SFC platform licensing and the restrictions that apply to mainland-linked issuers.
• Digital platforms and financial market infrastructure: the 2025 financial infrastructure measures, platform finance, internet loan facilitation and the digital RMB.
• Quantitative and programme trading rules: reporting, high-frequency trading thresholds and monitoring in the securities and futures markets.
• Generative AI in financial services: generative AI filings, content labelling, algorithm rules and sector guidance for banks, insurers and securities firms.

Market entry routes for fintech in China

There is no single fintech licence. A business model is broken down into its regulated components, and each is either licensed, outsourced to a licensed partner or removed from the product. Foreign and Chinese businesses usually choose between four routes, often combining them over time.

The right route depends on who must own the customer relationship, whether client funds will be held, how fees are earned and where data will be processed. Our market entry page explains the corporate steps for foreign-invested enterprises, and the financial institution M&A and establishment page covers licensing and acquisitions of regulated entities.

Timing should be planned realistically. A technology partnership can often be documented within weeks once the allocation of roles is settled, while a new licence application for fintech in China depends on regulator review and has no guaranteed timetable. Groups that need to launch quickly often start as a service provider to a licensed partner and apply for their own licence in parallel, with partnership agreements drafted so that the business can migrate later without breaching exclusivity, data or customer transfer terms. Planning that migration path at the start is one of the most useful decisions in any fintech in China project.

Key issues for foreign and Chinese fintech businesses

Although each business model is different, the same handful of issues tends to decide whether a project works.

Licensing and partnership models

Many foreign firms enter China by supplying technology, data or services to licensed institutions, rather than by obtaining a licence themselves. These arrangements must be drafted so that the technology provider does not take deposits, extend credit, hold client funds or price risk on its own account. Regulators look closely at fee structures and at who controls the customer relationship.

Data and cybersecurity

Financial data is often personal information and may be important data. The Personal Information Protection Law, the Data Security Law, the Network Data Security Management Regulations and the 2024 cross-border data flow provisions all apply, and the 2025 financial infrastructure measures add a requirement to store personal information and important data collected in China within China. See our pages on cross-border data transfer and PIPL compliance.

Foreign exchange and capital flows

Offshore structures that raise funds from, or return value to, mainland investors engage SAFE rules and, for outbound investment, NDRC and MOFCOM procedures. Token structures do not avoid these rules; the 2026 notice expressly brings offshore RWA linked to domestic rights within NDRC, CSRC and SAFE supervision.

Anti-money laundering and sanctions

The revised Anti-Money Laundering Law took effect on 1 January 2025, and Hong Kong's virtual asset regimes apply the FATF standards, including the travel rule. Many digital asset businesses also need to consider US, EU and UK sanctions. See anti-money laundering.

Disputes and enforcement

Contracts connected with prohibited virtual currency activity may be treated as void in the mainland, and the 2026 notice states that investors bear their own losses from such activity. Dispute resolution clauses, governing law and asset location therefore need particular care. See financial disputes.

Cross-border angles for fintech in China: Hong Kong, ASEAN, the EU and the US

Few projects involving fintech in China are purely domestic. Foreign groups bring products in; Chinese groups take payment, lending, wealth and digital asset businesses abroad. Each direction raises its own checklist.

• Hong Kong. The natural hub for digital asset and connectivity projects, with SFC platform licensing, HKMA stablecoin licensing and mutual market access schemes. The challenge is keeping mainland reach under control.
• Singapore and ASEAN. Chinese payment and lending groups often expand into Southeast Asia, where licensing under local payment services and lending regimes is required. Singapore's regime for digital token service providers serving only overseas customers tightened from mid-2025. See Southeast Asia market entry.
• European Union. MiCA has applied in full since 30 December 2024, and the Digital Operational Resilience Act (DORA) since 17 January 2025, which affects ICT providers to EU financial entities, including Chinese technology suppliers.
• United States. US outbound investment rules in effect since 2 January 2025 restrict certain US investments in Chinese businesses active in AI, semiconductors and quantum technology, which can catch AI-driven fintech targets. See US-China cross-border issues.

Launch checklist and common mistakes

Before launching a product that touches mainland users, assets or data, a short structured review saves time later. The steps below reflect the order in which questions usually need answering.

1. Break the product into its components: funds flow, credit, advice, distribution, custody, data and AI.
2. Identify for each component whether it is a regulated activity in the mainland, Hong Kong and other target markets.
3. Decide the route for each regulated component: own licence, licensed partner or exclusion.
4. Map data flows, including any transfer outside the mainland, and the filings or contracts needed.
5. Check foreign exchange, outbound investment and sanctions points for the group structure.
6. Draft partnership, outsourcing and customer documents to match the chosen allocation of roles.
7. Set monitoring for rule changes, including the draft Financial Law and pending Hong Kong legislation.

The mistakes we see most often are predictable: assuming that an offshore licence or entity puts a service outside mainland rules; paying technology partners by reference to loan interest or investment returns; treating data export as an afterthought; and launching token or stablecoin projects without checking whether mainland assets, persons or capital are involved. Each can be avoided by addressing it at the design stage rather than after launch.

How TRW & Co helps

From Shenzhen, our team works with fintech companies, financial institutions, investors and digital asset businesses on projects linking mainland China, Hong Kong and international markets. We advise on the laws of the jurisdictions in which our lawyers are qualified and on international market practice, and we explain how the Chinese regulatory environment affects a proposed structure. We help design cross-border structures, negotiate technology, partnership and token documentation, prepare regulatory roadmaps and manage multi-jurisdiction workstreams. Where a matter requires PRC legal advice, a filing with a mainland regulator, or court or arbitration representation in the mainland, we work alongside licensed PRC law firms. Our digital assets and tokenisation guide gives further context. To discuss a project, please contact us.