Caixin: RWAs Based on Hong Kong Assets Not Attributable to Mainland Chinese Regulators

BlockBeats News, February 22nd, according to Caixin's report, with the joint release of the People's Bank of China and eight other departments of the "Notice on Further Preventing and Dealing with Risks Related to Virtual Currency and Others" (referred to as "Document 42"), the regulatory framework for onshore assets to issue RWAs to offshore has emerged. The key tone of Document 42 is onshore prohibition and offshore strict regulation of RWAs.

According to knowledgeable regulatory sources, Hong Kong is one of the offshore RWA issuance locations. RWAs based on assets in Hong Kong are not within the scope of Document 42 regulation and are not the responsibility of onshore regulatory authorities. Currently, there are no RWAs based on onshore securities or fund underlying assets in offshore locations such as Hong Kong, but if there are, they are the responsibility of the China Securities Regulatory Commission. Furthermore, it is no longer a case of "all are not allowed." Now it is not to be interpreted as "encouragement for development" but rather strict regulation of onshore assets for outbound RWA. There is no 'encouragement' in this, and it must not be understood as 'promoting development'.