China eased its grip on the yuan (CNY) on Tuesday, allowing it to depreciate beyond a key level, likely in response to President Donald Trump’s aggressive tariffs.

Crypto analysts anticipate that the yuan’s depreciation could favor bitcoin (BTC), drawing parallels to similar events from a decade ago.

Early Tuesday, the People’s Bank of China (PBOC) set the so-called daily yuan fix at 7.2038 per dollar on Tuesday, the weakest since September. The yuan isn’t a free float currency like the USD, euro and other G-7 nations and is allowed to trade in a range of 2% on either side of the daily fix announced at 9:15 a.m. Beijing time.

The 7.2 level has been considered a «harder line in the sand» for the central bank for years. The USD/CNY pair has traded above the said level a few times since 2022 but never established a foothold.

That could change with the PBOC explicitly setting the daily mid-point beyond the 7.2 level. In other words, the move signals a shift to managed depreciation of the yuan, which will help keep China’s exports cheaper and competitive, potentially offsetting the negative impact of Trump’s tariffs on Chinese goods.

Capital flight into BTC?

The managed depreciation could also trigger capital flight from China, which may find home in cryptocurrencies, according to analysts.

«The U.S. is now pursuing full-scale economic pressure on China, which may be forced to respond with quantitative easing and a currency devaluation. If so—and if China permits capital flight—Bitcoin could surge, much like it did in 2015,» Markus Thielen, founder of 10x Research, said in a note to clients Monday.

The Chinese central bank devalued the yuan by 1.9% on Aug. 11, 2015, the most significant single-day depreciation in over two decades, sending shockwaves across global financial markets. Bitcoin initially fell over 20% with the U.S. stocks but quickly turned higher and surged nearly 60% in the following four months.

Ben Zhou, CEO and founder of the crypto exchange Bybit, voiced a similar opinion on X, saying yuan depreciation tends to bode well for bitcoin.

«China will try to lower RMB to counter the tariff, historically, whenever RMB drops, a lot of Chinese capital flow into BTC, bullish for BTC,» Zhou said on X.

Regulatory hurdles

While history tells us to expect a bullish BTC reaction to yuan depreciation, note that over the years, China has become anti-crypto, citing financial stability risks and has some of the world’s harshest regulations.

A new regulation announced earlier this year requires banks to monitor and report suspicious international transactions, including those involving cryptocurrency. Banks are obligated to investigate and report any risky crypto trades, which may result in financial restrictions and potential blacklisting for the trader.

The stringent stance means local traders may have a tough time diversifying into bitcoin and other digital assets in the event of a sustained yuan depreciation.

«Since August 2024, the Supreme People’s Court has significantly increased the legal risks for individuals using cryptocurrencies in connection with money laundering, which could easily extend to cases of capital flight,» Thielen said. «This presents a major deterrent, despite rising economic uncertainty.»

Galaxy Digital is moving closer to a U.S. stock market listing after the Securities and Exchange Commission (SEC) approved its registration statement tied to a corporate reorganization.

The crypto and AI infrastructure firm, currently listed in the Toronto Stock Exchange, aims to shift its home base from the Cayman Islands to Delaware and list shares on the Nasdaq as “GLXY.” The firm’s expansion into the U.S. market comes as institutional demand for regulated crypto products continues to grow.

The company has scheduled a shareholder vote on the reorganization for May 9. The firm is expected to list shortly afterward. CEO Mike Novogratz called the registration effectiveness “an important milestone” in the firm’s bid to expand its reach.

Galaxy provides institutional services in crypto trading, asset management, and tokenization. It also invests in and operates data centers that power AI and high-performance computing.

Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards. For more information, see CoinDesk’s full AI Policy.

The market for tokenized financial instruments, or real-world assets (RWAs), could reach $18.9 trillion by 2033 as the technology’s growth is nearing a «tipping point,» according to a joint report on Monday by Boston Consulting Group (BCG) by payments-focused digital asset infrastructure firm Ripple.

That would mean an average 53% compound annual growth rate (CAGR), taking the middle ground between the report’s conservative scenario of $12 trillion in tokenized assets in the next eight years and a more optimistic $23.4 trillion projection.

Tokenization is the process of using blockchain rails to record ownership and move assets—securities, commodities, real estate. It’s a red-hot sector in crypto, with several global traditional financial firms pursuing tokenization to achieve efficiency gains, faster and cheaper settlements and around-the-clock transactions. JPMorgan’s Kinexys platform has already processed more than $1.5 trillion in tokenized transactions, with over $2 billion in daily volume. BlackRock’s tokenized U.S. dollar money market fund (BUIDL), issued with tokenization firm Securitize, nears $2 billion in assets under management and is increasingly being used in decentralized finance (DeFi).

“[The] technology is ready, regulation is evolving, and foundational use cases are in the market,” said Martijn Siebrand, Digital Assets Program Manager at ABN AMRO, in the report.

The report highlighted tokenized government bonds, U.S. Treasuries, as an early success, allowing corporate treasurers seamlessly shift idle cash into tokenized short-term government bonds from digital wallets without any intermediaries, managing liquidity in real time and around the clock.

Private credit is another sector drawing attention, opening access to traditionally opaque and illiquid markets while offering investors clearer pricing and fractional ownership. Similarly, carbon markets are flagged as fertile ground, where blockchain-based registries could enhance transparency and traceability of emissions credits.

Key challenges still linger

Despite the growth, the report identified five key barriers for broader adoption: fragmented infrastructure, limited interoperability across platforms, uneven regulatory progress, inconsistent custody frameworks, and lack of smart contract standardization. Most tokenized assets today settle in isolation, with off-chain cash legs limiting efficiency gains. Tokenized asset markets struggle to unlock secondary liquidity without shared delivery-versus-payment (DvP) standards.

Regulatory clarity varies significantly by region. Switzerland, the EU, Singapore, and the United Arab Emirates have developed comprehensive legal frameworks for tokenized securities and infrastructure, while major markets like India and China remain restrictive or undefined. This uneven progress complicates cross-border operations and forces firms to tailor infrastructure market-by-market.

Despite these headwinds, early adopters are expanding fast. The report identifies three phases of tokenization: low-risk adoption of familiar instruments like bonds and funds; expansion into complex products such as private credit and real estate; and full market transformation, including illiquid assets like infrastructure and private equity. Most firms are currently in the first or second phase, with scalability hinging on regulatory alignment and infrastructure maturity.

Tokenization can unlock meaningful savings for processes such as bond issuances, real estate fund tokenization and collateral management, driving further growth, the report noted.

Cost is becoming less of a constraint for firms, the report said. Focused tokenization projects can now launch for under $2 million, while end-to-end integrations—covering issuance, custody, compliance, and trading—can cost up to $100 million for large institutions.

However, without industry-wide coordinated action, the same silos and fragmentation tokenization seeks to eliminate could reemerge in digital form, said in the report Jorgen Ouaknine, global head of innovation and digital assets at Euroclear, a global financial market infrastructure provider.