China: A FinTech Legal (PRC Firms) Overview
Overall Regulatory Landscape of China’s FinTech in 2025
For previous regulatory updates on mainland China’s FinTech sector, please refer to our article China: An Introduction to FinTech Legal (PRC Firms) Overview for last year's Chambers FinTech Guide.
In 2025, China’s FinTech regulation presents a core trend of being “precise, full-chain, and highly synergistic”, emphasising both standardisation and development while strengthening risk baselines and safeguarding innovation through institutional refinement. Regulatory coverage spans core industries such as payments, lending and wealth management, while clearly defining compliance boundaries for emerging fields to form a comprehensive governance system. For instance, the payment industry focuses on compliance implementation and quality enhancement; the lending industry strengthens control over comprehensive financing costs, fee standardisation and risk management; and the wealth management industry refines requirements for fund sales, performance disclosure, unified information disclosure for asset management products, and investor suitability obligations. All these measures aim to compress the space for regulatory arbitrage through detailed rules.
Furthermore, the regulatory boundaries for emerging fields have been clarified, explicitly categorising stablecoins as virtual currencies subject to illegal financial activity regulations and prohibiting domestic “real world assets-tokenisation” (RWA) token issuance and trading. At the foundational level, the framework continues to improve with the dense introduction of new anti-money laundering (AML) regulations implementing differentiated due diligence and “look-through” identification requirements. Financial consumer protection is integrated throughout the entire process, emphasising information protection, complaint response and the prohibition of misleading publicity. Regarding regulatory methods, innovation pilots are steadily advancing by leveraging technology to enhance supervisory efficiency. Multi-departmental collaborative documents have formed a regulatory synergy that maintains the bottom line of avoiding systemic risks while leaving sufficient development space for compliant innovation.
Payments Industry: Deepening Supervision and Compliance Implementation
In 2025, supervision in the third-party payment industry continued to deepen, centred on the conclusion of the grace period for the Regulations on the Supervision and Management of Non-Bank Payment Institutions. Payment licences have officially transitioned to long-term validity, and institutions are required to complete compliance rectifications, such as including “Payment” in their names and maintaining a minimum paid-in registered capital of CNY100 million. Throughout the year, several payment licences were cancelled, intensifying the “survival of the fittest” within the industry. In terms of supporting policies, the Administrative Measures for Bank Card Clearing Institutions took effect on November 1st to refine entry and business supervision. Additionally, the revised Business Rules of the Cross-border Interbank Payment System (CIPS) clarified access mechanisms for overseas institutions, laying the foundation for the standardised development of cross-border payments.
At the regulatory enforcement level, a “substance-over-form” compliance orientation was maintained. Multiple fines were issued throughout the year, with total penalties exceeding CNY100 million. Violations related to AML, client reserve fund management and merchant compliance (accounting for a significant proportion). The “double punishment” system – a regulatory mechanism whereby both the financial institution and the specific individuals responsible (such as senior management or directly liable personnel) are penalised for the same violation – has become standard practice. Meanwhile, the Regulations on Renminbi Cash Receipts and Payments and Services were released to strictly prohibit discriminatory refusal of cash, aiming to construct a synergistic environment for diverse payment methods and drive the payment industry towards higher quality and efficiency.
Lending Industry: Upgrading Regulation of Internet Loans and Consumer Finance
In 2025, regulation in the lending industry focused on reducing comprehensive financing costs and ensuring fee compliance. In April, the National Financial Regulatory Administration (NFRA) issued a notice regarding commercial bank internet loan facilitation, which clarified that credit enhancement service fees must be included in comprehensive financing costs borne by the borrower and explicitly prohibited platform operators from charging disguised interest or fees. This has prompted the emergence of various alternative fee models in the market.
In July, regulators conducted a survey on the “membership benefits fee models” of 31 consumer finance companies, targeting issues such as tying benefits to loan approvals, false advertising and default renewals. In October, regulators issued an internal guidance requiring consumer finance companies to cap the average comprehensive financing cost of new loans at 20%. In December, the People’s Bank of China (PBOC) and the NFRA jointly released guidelines requiring micro-loan companies to stop issuing loans with comprehensive financing costs exceeding 24% and encouraging a gradual reduction to within four times the Loan Prime Rate (LPR) by the end of 2027.
Wealth Management Industry: Strengthening Sales Compliance and Product Quality
The 2025 regulatory focus in the wealth management industry was on full-chain standardisation. In March, the NFRA released the Administrative Measures for the Agency Sale of Business by Commercial Banks, establishing a “dual-list” management system for co-operative institutions and products and prohibiting product displays based solely on historical performance rankings. In May, the China Securities Regulatory Commission (CSRC) released an action plan for the high-quality development of public funds. Furthermore, the Asset Management Association of China (AMAC) released multiple draft regulations concerning various operational stages of public funds. In July, the Administrative Measures for the Suitability of Financial Institutional Products were introduced, explicitly banning the manipulation of performance to mislead customers. Additionally, in October, the daily quick redemption limit for cash management products was reduced to CNY5,000, and the pension wealth management pilot was expanded nationwide. In December, the Administrative Measures for Information Disclosure of Asset Management Products of Banking and Insurance Institutions were officially released to unify standards throughout the product life cycle.
Industry trends are characterised by the coexistence of compliance adaptation and innovation. Wealth management companies have increased their capital to enhance risk resilience, and the transformation towards Net Asset Value (NAV)-based products has deepened. Specialised products such as pension and green wealth management are expanding, and institutions are strengthening their investment research capabilities and investor education. On the sales side, non-compliant publicity is being cleared out, and the industry is shifting from scale expansion to high-quality development, with resources concentrating towards top-tier compliant institutions.
Other Relevant Areas: Multi-Dimensional Regulatory Integration
In 2025, regulation in the fields of e-CNY, blockchain, consumer protection and AML was precisely implemented. For e-CNY, regulation focused on deepening scenarios and cross-border synergy via the mBridge platform. In financial consumer protection, full-process rights protection was strengthened, requiring institutions to establish information security mechanisms and rapid complaint response channels. In the blockchain sector, a co-ordination mechanism meeting on November 28th clarified that stablecoins are a form of virtual currency and included them in the scope of illegal financial activity regulation. In December, national associations issued risk warnings prohibiting domestic institutions from providing any services for virtual currency or RWA token issuance and trading.
In the AML field, several new regulations were introduced. On November 28th, the PBOC, NFRA and CSRC jointly issued new measures for customer due diligence (CDD), which implemented differentiated due diligence, removing the requirement to register fund sources for individual cash transactions exceeding CNY50,000, while strengthening investigations for high-risk scenarios. On December 1st, the revised Administrative Measures for Large-Value and Suspicious Transaction Reports took effect, extending the transaction record retention period to ten years. In December, new measures for identifying beneficial owners were released, refining “look-through” identification standards and prohibiting reliance solely on automated means as a substitute for risk judgment.