Core Viewpoint - The recent issuance of the "Notice" and "Guidelines" by the People's Bank of China and the China Securities Regulatory Commission aims to regulate the tokenization of real-world assets (RWA) and mitigate associated risks, while providing a clear framework for compliant asset-backed securities (ABS) in the context of cross-border financing [1][2][3]. Group 1: Regulatory Framework - The "Notice" defines RWA tokenization as the conversion of asset ownership and income rights into tokens using cryptographic and distributed ledger technologies, with regulatory oversight from the CSRC and relevant departments for domestic entities engaging in overseas tokenization activities [3]. - The "Guidelines" specify that tokenized equity certificates issued overseas must be backed by cash flows from domestic assets or related rights, establishing a dual-layer regulatory structure to prevent regulatory evasion [3][4]. - The regulatory approach includes a broad definition of RWA to encompass all domestic rights tokenized abroad, while the CSRC's guidelines focus on cash flow-backed assets, ensuring that compliance pathways are limited to tokenized ABS with clear underlying assets [3][4]. Group 2: Compliance Dimensions - The "Guidelines" outline five compliance dimensions for tokenized ABS, which include ensuring stable cash flow for issuers, enhancing the technological capabilities of financial service providers, and establishing a clear regulatory framework for cross-border tokenization [4]. - The introduction of tokenized ABS into the regulatory framework allows for the exploration of diversified overseas financing paths for entities with stable cash flows, leveraging global liquidity [4]. - The compliance structure mandates that any issuance of tokens backed by domestic assets must adhere to a negative list of underlying assets, ensuring that the activities do not jeopardize national security [4]. Group 3: Market Context and Implications - As of February 6, 2026, the RWA market has reached a scale of $24.4 billion, covering various asset types including U.S. Treasury bonds, commodities, and private equity, indicating significant growth and interest in this sector [2]. - The issuance of the "Notice" and "Guidelines" is a response to the speculative activities in the RWA space that disrupt economic order and threaten public financial security, highlighting the need for a robust regulatory framework [2][3]. - The anticipated launch of the first batch of tokenized ABS projects approved by the CSRC will focus on the fundamental performance of the underlying assets and the stability of cash flows, while also considering compliance and market volatility [4].