The People's Bank of China and seven other departments: Implement strict regulation on domestic entities engaging in virtual currency-related activities abroad

Odaily Planet Daily reports that the People’s Bank of China and seven other departments have issued a notice on further preventing and addressing risks related to virtual currencies and other related issues. The notice mentions that for domestic entities engaging in relevant activities abroad, strict supervision shall be enforced. Without the approval of relevant departments in accordance with laws and regulations, domestic entities and their controlled overseas entities are not allowed to issue virtual currencies abroad. Domestic entities directly or indirectly engaging in overseas foreign debt tokenization business, or conducting asset securitization or equity-like tokenization of real-world assets based on domestic asset ownership, income rights, and other rights (hereinafter collectively referred to as domestic rights) abroad, shall be subject to strict supervision by the National Development and Reform Commission, China Securities Regulatory Commission, State Administration of Foreign Exchange, and other relevant departments according to their responsibilities, following the principles of “same business, same risk, same rules.”

When domestic financial institutions’ overseas subsidiaries and branches provide services related to real-world asset tokenization abroad, they must do so prudently and in accordance with the law, equipped with professional personnel and systems, effectively prevent business risks, strictly implement customer access, suitability management, anti-money laundering, and other requirements, and incorporate these into the compliance and risk control management system of domestic financial institutions.