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No positive legal taxonomy confers lawful-asset or currency status on any crypto-asset category. The PBOC denies virtual currencies legal-tender status, and the February 2026 notice extends non-fiat-currency-status language explicitly to stablecoins including USDT. NFTs ('digital collectibles') remain in an unresolved regulatory gray zone, distanced from crypto exposure via permissioned-chain architecture and a bar on cryptocurrency-denominated purchase.
NFTs occupy a distinct and only partially resolved position within this classification landscape. Marketed domestically as "digital collectibles," NFTs are not formally banned and exist in a regulatory gray area without comprehensive rules specific to the asset class. Market participants have structurally distanced NFT products from cryptocurrency exposure -- these products cannot be purchased with cryptocurrency and are typically built on permissioned rather than public blockchains, an architecture choice that appears designed specifically to avoid association with the broader crypto prohibition rather than reflecting any formal regulatory carve-out.
Outlook
Token classification in mainland China should be read as a stable but entirely negative landscape: there is no positive taxonomy under which any crypto-asset acquires lawful status, and the February 2026 notice's extension of non-fiat-status language to stablecoins forecloses any near-term prospect of a differentiated stablecoin classification pathway opening onshore. The NFT gray zone remains the one area of this module carrying genuine classification ambiguity rather than settled prohibition, and its trajectory depends on whether Chinese regulators move to formalize rules for permissioned-chain digital collectibles or instead fold them into the broader prohibition architecture -- neither of which has yet occurred as of this cycle. Sourcing for the core legal-tender-denial claims rests on T4 secondary reporting only; the NFT gray-zone characterization similarly rests on T4 reporting with no primary regulatory guidance identified.
Token Classification
Two distinct token-classification developments arise from this cycle's evidence. First, under Notice No.42, RMB-pegged stablecoins are treated as performing a legal-tender-adjacent function, and on that basis no onshore or offshore entity may issue a CNY-pegged stablecoin without explicit approval from relevant PRC authorities, an approval regime that functions in practice as a prohibition given that no such approval has been granted to any private issuer. This is assessed at Probable confidence, sourced from Lexology's law-firm commentary characterising the notice's operative text.
Second, and distinctly, a CSRC guideline issued the same day as Notice No.42 creates a new supervisory classification for offshore-circulated real-world-asset tokens that function as securities or debt-financing tools, bringing them under PRC regulatory oversight via a dedicated guideline. This is explicitly a newly-created supervisory lane rather than a licensing pathway or an affirmative legalisation, and confidence here is Uncertain, reflecting both the narrower and newer nature of the underlying source (Library of Congress Global Legal Monitor reporting, itself secondary to the PRC instruments) and the absence of detail on how this oversight lane will operate in practice.
The distinction between these two classification treatments matters: RMB-pegged stablecoins face an outright prohibition-with-approval-gate model that functions as a ban, while offshore RWA securities tokens face a supervisory-oversight model that, while restrictive, is conceptually different, a lane for regulatory visibility rather than a blanket prohibition.
Outlook
Watch for any further guidance clarifying how the CSRC's offshore RWA securities-token oversight lane will operate in practice, and whether any entity applies for, or is denied, approval to issue a CNY-pegged stablecoin under the Notice No.42 approval-gate mechanism.
2 earlier distinct update(s)
Token Classification
Notice 42 restates and specifies China's token-classification approach with renewed clarity. Bitcoin, Ether, Tether and similar virtual currencies are confirmed not to be legal tender and must not circulate or be used as currency in China (CLM-CN-003), a Confirmed finding though sourced at Tier-3 in this cycle's evidence rather than a directly quoted primary-text classification clause. Separately, and this is the more substantively new element, the notice establishes that no entity — Chinese or foreign, including overseas branches of domestic firms — may issue an offshore stablecoin linked to the renminbi without prior government approval (CLM-CN-004). This is a narrow, dynamically-assessed approval-gate posture specific to offshore RMB-pegged stablecoins, not a general licensing regime extended to stablecoins as a token category, and not an authorisation of onshore stablecoin issuance in any form.
The classification architecture therefore now distinguishes at least three token categories in practical effect: general virtual currencies (Bitcoin, Ether, and similar), which are comprehensively prohibited from circulation and use as currency; offshore RMB-pegged stablecoins specifically, which face a narrow approval gate rather than an outright ban; and real-world-asset tokens, which the notice extends scrutiny to without necessarily prohibiting outright. This differentiated treatment is a meaningful refinement over a single undifferentiated prohibition category.
Outlook
Whether the offshore-stablecoin approval gate is ever actually granted to any applicant — as opposed to functioning as a de facto prohibition through non-approval — is the key open question for this classification category going forward. No approval grant has been reported this cycle.
Token Classification
This cycle marks the first instrument identified in this monitor's research that sets out China's stance on stablecoins and real-world-asset tokenization in named, rather than merely inferred, terms. Circular Yin Fa [2026] No. 42 addresses two token categories directly. First, it prohibits any entity -- Chinese or foreign -- from issuing a stablecoin linked to the renminbi abroad without government approval, a formulation that functions as an approval-gated prohibition given the absence of any described approval pathway or precedent for such approval being granted. Second, it requires Chinese firms seeking to tokenize real-world assets overseas to obtain approvals or file with regulators, and imposes heightened compliance standards on the partners those firms work with in doing so. Both provisions bring stablecoins and RWA tokenization into a defined regulatory perimeter for the first time in this monitor's coverage of the jurisdiction, even though that perimeter is restrictive rather than enabling. The supervisory authority for this module is attributed to PBOC together with CSRC, reflecting the joint monetary and securities-market dimensions of stablecoin and tokenized-asset activity respectively. Both claims underlying this module carry high materiality ratings and are treated as new rather than restated developments, distinguishing this module's status this cycle from the largely unchanged licensing and on-chain-activity modules.
Outlook
The explicit naming of stablecoins and RWA tokenization as restricted categories, rather than leaving them to be inferred from the general prohibition, is likely to be the most consequential structural change in this jurisdiction's token-classification posture for some time. Because the provisions are framed as approval-gated rather than as an outright unconditional ban, there is a narrow theoretical possibility that an approval pathway could eventually be specified in implementing guidance; nothing in this cycle's research indicates that such guidance exists yet, and the monitor is not asserting one. Continued monitoring should watch specifically for any implementing rules that would give operational content to the approval-and-filing requirements described here, since their absence to date leaves the practical scope of permitted activity, if any, undefined.
Sources and findings (3)
- T4 · The BlockPeople's Bank of China (PBOC) — Virtual currencies do not have the same legal status as fiat currencies, lack legal-tender status, and should not and cannot be used as currency in the market.retrieved M5bindingin forceupdated
- T4 · The BlockEight-agency joint notice (Feb 2026) — All cryptocurrencies, including bitcoin and stablecoins like USDT, do not have the same legal status as fiat currency and should not circulate as money.retrieved M5bindingin forceupdated
- T4 · CoinDeskNFTs ('digital collectibles') — NFTs, marketed as 'digital collectibles,' are not formally banned but exist in a regulatory gray area without comprehensive rules; cannot be purchased with cryptocurrency and are built on permissioned rather than public blockchains to avoid crypto association.retrieved M3non-binding