Caixin: RWA based on Hong Kong assets are not under the jurisdiction of Chinese regulatory authorities

Odaily Planet Daily News: Following the joint release by the People’s Bank of China and seven other departments of the “Notice on Further Preventing and Disposing of Risks Related to Virtual Currencies” (referred to as the “Notice No. 42”), the regulatory framework for domestic assets issuing RWA abroad has begun to take shape. The overall tone of the Notice No. 42 is that RWA is strictly prohibited domestically and tightly regulated abroad.

According to informed regulatory sources, Hong Kong is one of the offshore issuance locations for RWA. RWA based on Hong Kong assets is not within the scope of regulation under the Notice No. 42 and is not under the responsibility of domestic regulatory authorities. Currently, there are no underlying assets based on domestic securities or funds in offshore RWA in Hong Kong or other regions. If there are, they are under the jurisdiction of the China Securities Regulatory Commission’s Institutional Department. Additionally, “it was previously completely prohibited.” Now, “it is not said to be completely prohibited,” but there is strict regulation on domestic assets going abroad for RWA. There is no “encouragement” implied here; it should not be interpreted as “promoting development.” (Caixin)