RWA Tokenisation in China

RWA tokenisation in China: the current position

RWA tokenisation in China is now governed by an explicit framework rather than by inference from the crypto rules. The February 2026 notice on virtual currency risks (Yin Fa [2026] No. 42) defines real-world asset tokenisation as using cryptographic and distributed ledger technology, or similar technologies, to convert ownership or income rights in assets into tokens or token-like rights and certificates, which are then issued and traded. Two rules follow from that definition.

• Onshore, RWA tokenisation and related intermediary and technology services are prohibited as suspected illegal financial activity, unless the business has been approved by the competent authority and is conducted on specified financial infrastructure.
• Offshore, RWA based on domestic rights and interests is permitted only with approval or filing. Debt-type structures and asset-backed securitisation or equity-type structures fall within the responsibilities of the NDRC, CSRC and SAFE according to their remits, and other forms are supervised by the CSRC together with other departments.

On the same day, the CSRC issued a Regulatory Guideline on the Offshore Issuance of Asset-Backed Security Tokens Based on Domestic Assets, which sets out the filing route for the most common form of offshore RWA.

For RWA tokenisation in China, the result is a clear dividing line. Mainland assets may support tokens issued and traded offshore, typically in Hong Kong, if the regulatory path is followed, but tokens may not be issued or traded onshore outside approved infrastructure, and mainland platforms, institutions and service providers may not support unapproved business. For asset owners, that turns tokenisation from a grey-area experiment into a regulated capital-raising route that sits beside offshore bonds and securitisation.

The CSRC filing route for asset-backed security tokens

Under the CSRC guideline, the domestic entity that actually controls the underlying assets is the filing entity and must file with the CSRC before carrying out the business. The main features are summarised below.

The guideline also lists circumstances in which the business may not proceed, including where capital market financing is prohibited by law, where the authorities determine that the issuance may endanger national security, where the filing entity or its controllers have committed specified economic crimes in the past three years or are under investigation, where the underlying assets are subject to material ownership disputes or cannot lawfully be transferred, and where the assets fall within the negative list for domestic asset securitisation.

The issuer must also comply with cross-border investment, foreign exchange, network security and data security requirements and complete any applicable security reviews. The text is available on the CSRC website. Because filing information is published, issuers should assume that the market, investors and counterparties will see the outline of the transaction before launch.

Preparing the filing: a checklist

• Title documents and evidence that the assets are free of material disputes and can lawfully be transferred or pledged.
• Confirmation that the assets are outside the negative list for domestic asset securitisation.
• Background checks on the filing entity, its controlling shareholder and actual controller against the excluded circumstances.
• A complete set of offshore issuance documents, including the token terms, offering memorandum and servicing arrangements.
• A cash flow map showing collection, conversion, remittance and distribution, with the foreign exchange steps identified.
• A data inventory identifying any personal information or important data that will leave the mainland.

Other approvals that may apply

A CSRC filing is rarely the only step in RWA tokenisation in China. Depending on structure, a mainland-linked tokenisation may engage:

• NDRC foreign debt review and registration where the tokens are debt-like and issued by a domestic entity or its offshore subsidiary;
• SAFE registration and rules on cross-border flows of funds, including the repatriation of proceeds;
• outbound investment procedures where a domestic entity establishes or funds the offshore issuing vehicle (see ODI approvals);
• data export rules where asset-level data, such as charging station, receivables or energy output data, is transferred offshore for on-chain reporting (see cross-border data transfer);
• sector rules for the underlying asset, such as rules on state-owned assets or on infrastructure concessions.

Mainland financial institutions' offshore subsidiaries and branches are expected to act prudently, and intermediaries and technology providers that serve offshore RWA business must establish compliance controls and report to the supervisory authorities. Mainland financial institutions may not provide custody or clearing for unapproved RWA business.

Which regulator leads?

Classification drives the regulatory path, so it should be settled before documents are drafted.

RWA tokenisation in China: a step-by-step project path

Every transaction is different, but most projects linking mainland assets to an offshore token issuance follow a similar sequence. Mainland and offshore workstreams run in parallel, and the critical path is usually the mainland approval or filing.

1. Asset selection. Confirm that the assets generate stable, verifiable cash flows, are free of material ownership disputes, can lawfully be transferred and are not on the securitisation negative list.
2. Classification. Decide whether the token is asset-backed, debt-type, equity-type or another form, which determines the lead regulator.
3. Structure. Design the offshore issuing vehicle, the holding chain and the contractual or proprietary link back to the mainland assets.
4. Mainland steps. Prepare the CSRC filing or other approvals with licensed PRC counsel, together with any outbound investment, foreign debt, SAFE and data export procedures.
5. Offshore steps. Engage licensed intermediaries, prepare offering documents, and settle custody, token administration and platform arrangements in the host market.
6. Technology. Build or license smart contracts with transfer restrictions, whitelisting and freezing functions; arrange audits.
7. Issuance and reporting. Issue to eligible investors and complete post-issuance reports to the CSRC and host-market regulators.

A simplified worked example shows how the pieces fit. A mainland operator of electric vehicle charging stations wants to raise funds from Hong Kong professional investors against future charging revenues. An offshore vehicle issues asset-backed tokens; the operator files with the CSRC before issuance; charging data is reported on-chain only after the data export analysis is complete; revenues are converted and remitted under SAFE rules; and the Hong Kong offering is made through SFC-licensed intermediaries to professional investors only. If any mainland step is withdrawn, the documents set out what happens to distributions and redemption.

The Hong Kong side of the structure

Hong Kong is the most common offshore venue for mainland-linked RWA, and most RWA tokenisation in China projects to date have been planned around it. Tokenised securities are treated as securities under the Securities and Futures Ordinance, so offering, dealing and advising activities require SFC licensing and offering documents must comply with Hong Kong prospectus and product rules.

The SFC reported that, by 31 March 2026, there were 13 tokenised retail products, and that Project Ensemble, run with the HKMA, had moved into a pilot phase called EnsembleTX in November 2025 for real-value transactions in tokenised deposits and digital assets. Our stablecoins and Hong Kong virtual asset licensing page explains the licensing framework.

Since November 2023 the SFC has set out its expectations for intermediaries engaging in tokenised securities-related activities and for the tokenisation of SFC-authorised investment products. In broad terms, the SFC looks through the token to the underlying instrument, applies existing securities rules, and expects intermediaries to manage the additional risks of the technology, including ownership records, smart contract security and custody of the tokens. Distribution to retail investors raises the bar further, which is why many mainland-linked issuances are offered to professional investors only.

Other offshore venues

Hong Kong is not the only option, and some sponsors compare venues before deciding. In general terms, Singapore has developed tokenisation through industry pilots led by the Monetary Authority of Singapore, and tokenised capital markets products are regulated under its securities laws. The European Union's pilot regime for market infrastructures based on distributed ledger technology allows authorised infrastructures to trade and settle tokenised financial instruments under tailored conditions. In the United States, tokenised securities remain subject to federal securities laws, so offerings typically rely on registration exemptions and restrictions on resale. For mainland-linked assets, the mainland approval or filing applies whichever venue is chosen.

Structuring questions and common mistakes in RWA tokenisation in China

• Is the token a debt instrument, an asset-backed security, a fund interest or an equity-like right, and which regulator therefore leads?
• Does the token holder have enforceable rights against the domestic asset, or only against an offshore vehicle with contractual claims?
• How are revenues converted and remitted, and what happens if a foreign exchange registration lapses?
• Who are the permitted investors in the host market, and how is mainland retail participation excluded?
• Which smart contract functions, such as transfer restrictions or freezing, are needed to meet regulatory obligations?

The most frequent mistakes in RWA tokenisation in China projects are predictable. Sponsors launch offshore marketing before the mainland filing is complete; use mainland technology providers or platforms to promote the offering to mainland users; treat on-chain transfer as conclusive of legal ownership without checking the offshore register; and move asset-level data offshore before the data export analysis is done. Each can delay a filing or undermine investor protections.

Traditional securitisation remains an alternative for many assets, and in some cases a conventional offshore bond achieves the same commercial result with fewer moving parts. See securitisation, ABS and ABN and offshore bonds. The decision should weigh investor demand for tokenised settlement against the extra legal, technology and custody costs.

RWA tokenisation in China compared with conventional financing

Sponsors often ask whether tokenisation offers anything that a conventional offshore bond or asset-backed security does not. The honest answer is that the economics can be very similar, and the mainland regulatory steps are comparable. The differences lie in distribution, settlement and record-keeping.

Tokenisation may make most sense where investors already hold assets on-chain, where frequent transfers or programmable distributions add value, or where the asset generates granular operating data that investors want to see. Where none of these apply, a conventional instrument may be quicker and cheaper.

What to watch in 2027

The framework is new and practice is still forming. Points to monitor include how many filings the CSRC completes and publishes, how the NDRC and SAFE apply their procedures to debt-type tokens, whether "specified financial infrastructure" for onshore approved business is designated more widely, and how Hong Kong develops settlement in tokenised deposits and licensed stablecoins. Sponsors of RWA tokenisation in China should also watch how host-market regulators treat secondary trading of tokens on licensed platforms, because liquidity is a large part of the investment case. See our digital assets and tokenisation guide for wider context.

How TRW & Co helps

We help asset owners, arrangers, platforms and investors plan tokenisation projects that link mainland assets with Hong Kong and other offshore markets. Our work includes structuring the offshore issuing and holding chain, mapping the mainland approval and filing path, preparing and negotiating token, custody and servicing documentation, and advising on the laws of the jurisdictions in which our lawyers are qualified. We coordinate licensed PRC law firms where PRC legal opinions, CSRC filings or other mainland regulatory submissions are required, and work with Hong Kong counsel and technology providers so that legal, regulatory and smart contract design align. To discuss a tokenisation project, please contact us.