China’s RWA Ban vs. US-UK Crypto Pact: Market Turmoil Ensues

China’s securities regulator has directed domestic brokerages to suspend real-world asset (RWA) tokenization activities in China Hong Kong, signaling a regulatory tightening in the crypto and DeFi sectors. The China Securities Regulatory Commission (CSRC) issued informal guidance urging firms to halt projects converting stocks, bonds, and real estate into tokens, a move that has already caused share prices of affected brokers like Guotai Junan International and GF Securities to decline . This development raises concerns about the future of RWA tokenization, with analysts noting that China’s regulatory caution could push offshore projects to more permissive jurisdictions or intensify global regulatory scrutiny .

In a parallel move, the United States and the United Kingdom announced the formation of the Transatlantic Taskforce for Markets of the Future to align their approaches to digital asset regulation and capital market innovation. The task force, unveiled during U.S. President Donald Trump’s state visit to the UK, aims to reduce regulatory arbitrage and foster cross-border collaboration on issues such as stablecoin oversight, asset custody, and anti-money laundering standards . Both governments emphasized that the initiative would address the rapid pace of technological change in financial markets, with a report expected within 180 days . Industry stakeholders, including Coinbase, Circle, and Ripple, were involved in the discussions, underscoring the task force’s focus on balancing innovation with investor protection .

The announcement comes amid a volatile crypto market, where over $1.5 billion in positions were liquidated in derivatives markets following a sharp sell-off. Bitcoin (BTC) and Ethereum (ETH) both experienced significant declines, with BTC dropping nearly 3% to $111,000 and ETH falling 9%, while altcoins like XRP and Solana also suffered losses . Analysts attributed the liquidations to overcrowded long positions and high leverage, which amplified downside risks during the sell-off. The slump followed earlier optimism tied to Federal Reserve rate cut expectations, highlighting the continued sensitivity of crypto markets to macroeconomic signals .

The interplay between regulatory shifts and market dynamics has further complicated the outlook for digital assets. While the U.S. and UK seek to harmonize crypto rules, China’s RWA crackdown underscores the fragmented global regulatory landscape. Meanwhile, the $1.5 billion liquidation event illustrates the fragility of leveraged positions in a market where sentiment can shift rapidly. For investors, the next critical junctures will be the outcomes of the transatlantic task force’s recommendations and whether China’s RWA pause signals a broader regulatory pivot .

Source: [1] [NEWS DIGEST – 23.09.2025] (https://coinstelegram.com/coinstelegram-confidential/china-halts-rwa-%f0%9f%87%a8%f0%9f%87%b3-us-uk-crypto-task-force-%f0%9f%a4%9d-1-5b-liquidations-%f0%9f%93%89-btc-eth-xrp-slump-%f0%9f%94%bb/)

[2] [UK and US Form Crypto Task Force to Shape Global Digital Assets …] (https://finance.yahoo.com/news/uk-us-form-crypto-task-172010869.html)

[3] [US, UK Authorities to Form Digital Asset Task Force] (https://cointelegraph.com/news/us-uk-digital-asset-task-force-regulation)

[4] [Crypto Tracing, China’s Crypto Ban, and Potential Global Regulation] (https://www.thinkbrg.com/thinkset/ts-crypto-tracing-china-crypto-ban-global-regulation/)