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- China issues $600M tokenized bonds to advance its CBDC-based financial framework

- Regulators intensify crackdowns as stablecoin and crypto speculation reappear

- Yuan management and FX intervention add pressure alongside digital-asset controls

China expanded its state-directed digital-asset infrastructure this week as Hua Xia Bank issued 4.5 billion yuan ($600 million) in tokenized bonds while authorities likewise reasserted restrictions on stablecoins and cryptocurrency activity. The dual changes reflect Beijing's ongoing effort to establish a controlled blockchain-based financial infrastructure through the digital yuan, even as officials respond to renewed speculative activity tied to private digital assets.

Hua Xia Financial Leasing, a subsidiary of the state-controlled Hua Xia Bank, issued the tokenized government-linked bonds on Wednesday with a three-year fixed yield of 1.84%. The entire tranche was auctioned exclusively to users of China's digital renminbi, strengthening the central bank's strategy of channeling financial activity through CBDC infrastructure. Local reporting indicated that the sale sought to reduce clearing friction by eliminating intermediaries, with the permissioned blockchain framework designed to shorten settlement timelines and lower transaction costs.

The offering follows a period of regulatory recalibration around private stablecoins in 2025. Throughout the year, officials alternated between enforcement actions and discussions about allowing yuan-denominated tokens to be traded in foreign-exchange markets. While some domestic technology firms began exploring such products, policy signals later shifted, pausing development efforts after warnings from Beijing in October.

Regulators Renew Scrutiny as ‘Speculation Resurfaces'

The People's Bank of China (PBOC) reiterated its ban on the crypto market after a meeting with 12 agencies, stating that speculative activity had reemerged. The central bank noted that virtual currencies lack legal tender status and classified related business activity as illegal. Stablecoins were highlighted as a specific risk, with the PBOC citing concerns about customer identification, anti-money laundering compliance, and their potential use in illicit cross-border transactions.

Earlier this year, regulators instructed local firms to cancel seminars related to stablecoins and halt research publications on the topic. The actions were accompanied by concerns that such tokens could facilitate fraud or circumvent supervision, according to public statements and prior reports.

Currency Management Adds Another Layer to Policy Environment

The shifting regulatory actions coincided with moves in China's foreign-exchange markets. The onshore yuan reached a peak near 7.06 per dollar on Wednesday, its strongest level since late 2024. Major banks reportedly purchased dollars and held them to limit rapid appreciation, tightening liquidity and raising costs for traders positioning for additional yuan strength. The currency eased slightly to around 7.07 per dollar on Thursday.

Together, the tokenized bond issuance and stepped-up regulatory messaging underscore China's ongoing effort to expand state-sanctioned digital infrastructure while maintaining strict boundaries around private crypto activity.