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China Reclassifies RWAs as High-Risk Assets

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China's financial associations have reportedly reclassified Real-World Asset (RWA) tokenization as a 'risky' activity, placing it alongside stablecoins, 'air coins,' and crypto mining in the country's prohibited financial categories. This policy shift, reported by Wu Blockchain, represents a significant regulatory hardening that could impact global RWA development strategies and market sentiment toward tokenized assets.

While this development creates immediate headwinds for RWA projects with Chinese exposure, the broader market implications may be nuanced. The classification reflects China's ongoing conservative stance toward crypto-adjacent innovations, potentially accelerating regulatory clarity in other jurisdictions. Market participants should monitor how this affects RWA liquidity and development roadmaps, particularly for projects targeting cross-border applications.

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