- China expands CBDC use with Hua Xia’s tokenized bond sale to digital yuan holders.
- Regulators intensify scrutiny on crypto trading and highlight stablecoin compliance risks.
- State banks intervene in FX markets as yuan strengthens and digital-yuan oversight increases.
China’s push to upgrade its digital-asset market entered a new phase this week after Hua Xia Bank sold 4.5 billion yuan ($600 million) in tokenized, government-linked bonds to digital-yuan users. At the same time, regulators restated countrywide limits on cryptocurrency trading and renewed warnings over stablecoin activity, signaling a sharper split between state-backed rails and private tokens.
The moves fit Beijing’s effort to expand state-sanctioned blockchain applications through the digital yuan and permissioned networks, even as it leans harder against renewed speculation in privately issued digital assets.
Related: China’s Tech Giants Want a Yuan-Backed Stablecoin; Now, Its Regulators Are Listening
China Uses Digital Yuan Rails For Tokenized Bond Pilot
Hua Xia Financial Leasing, a subsidiary of publicly traded Hua Xia Bank, issued the tokenized bonds on Wednesday, offering a three-year fixed yield of 1.84%. The entire tranche went to holders of China’s digital renminbi, underscoring a plan to integrate central bank digital currency in both distribution and settlement.
The sale ran on permissioned blockchain infrastructure designed to streamline clearing by shrinking the number of intermediaries involved. Supporters argue that faster settlement and lower transaction costs are key goals as China builds tightly controlled on-chain financing channels under its CBDC program, a shift that could shape how future bond issues are structured.
The issuance also comes as China reworks its stance on private stablecoins and cryptocurrencies through 2025. Authorities have alternated between targeted enforcement actions and narrow openings for companies exploring yuan-linked tokens, leaving markets to navigate a clearly favored CBDC track alongside restricted private activity.
PBOC Reasserts Crypto Trading Ban and Targets Stablecoin Risk
The People’s Bank of China (PBOC) reiterated its nationwide crypto trading ban after reporting that “virtual currency speculation has resurfaced.” The central bank stated that digital assets do not hold legal tender status and that related business activities remain prohibited. Stablecoins were singled out as a risk, with officials citing concerns about gaps in customer identification and potential misuse in money laundering, fundraising fraud, and illicit cross-border transactions.
Related: China’s PBOC Reaffirms Crackdown on Crypto Trading and Illegal Stablecoin Usage
Earlier in the year, reports showed Beijing was considering allowing yuan-denominated stablecoins to strengthen the currency’s position in foreign exchange markets. Technology firms, including Alibaba, Ant Group, and JD.com, began assessing token development before regulators issued warnings in October, prompting them to halt those plans.
Currency Management Continues Through Yuan Market Actions
China’s foreign-exchange strategy also aligned with its digital-asset posture this week. After the onshore yuan reached its strongest level since late 2024, peaking near 7.06 per dollar, major state banks purchased dollars to manage volatility and preserve export competitiveness. The currency later eased to around 7.07 per dollar.
Meanwhile, the PBOC’s digital-yuan operations center, opened in Shanghai in September, is set to oversee cross-border settlement and future blockchain initiatives, thereby strengthening the state’s focus on regulated digital finance infrastructure.
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