China is home to the second-largest economy in the world. It is also home to many very large Fintechs. Recently, it was reported that authorities reiterated their ban on crypto and on private firms enabling digital assets. But one observer says China is not anti-tokenization; the country just wants to control it.
Faisal Monai, CEO of droppRWA, a tokenization enabler, says China is clearly interested in RWA tokenization, and recent government proclamations did not ban tokenization. It banned private tokenization, which is a bit different. According to Monai, there is a carve-out exception for activity conducted on state-approved platforms.
“Beijing is saying what a lot of governments are thinking but haven’t said publicly yet, real-world assets on public, permissionless chains are a non-starter for sovereign economies,” says Monai. “The only version of this that works is state-controlled, sovereign-native infrastructure.”
Monai, who is based in Saudi Arabia, notes that his home country has come to the same conclusion but from a different direction. He explains that Saudi Arabia went straight to building it and integrating tokenization directly into national property registration and executing live sovereign transactions.
In Saudi Arabia, the private sector is building on top of the tokenization infrastructure, but the state owns the rails.
“Singapore, Hong Kong, the UAE, are all advancing regulated frameworks and supervised pilots. But the jurisdictions that will actually define this market aren’t the ones testing in sandboxes. They’re the ones putting national infrastructure into production. That’s where this is heading and China’s notice just made it harder to argue otherwise.”