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Cryptocurrency, the Unraveling of Cyber Religion in Progress?
At the end of last year, during a dinner with a friend I met on a trip, I was asked, "What interesting things are still happening in the crypto world?"
I mentioned the trend of Bitcoin epitaphs in 2023, the approval of a Bitcoin spot ETF in the U.S., the meme coin speculation frenzy on Solana, Bitcoin hitting a new all-time high, and so on.
After listening, my friend just smiled and shook her head, saying, "It's all meaningless."
This friend of mine, who bought various concept assets during the time when celebrities were rushing to buy or even issue NFTs, Facebook rebranded to Meta embracing the metaverse, various DAO organizations were popular in trying to buy the U.S. Constitution, an NBA team, or an island to build a utopia, has not sold any of them to this day.
These narratives have become stale in the eyes of the crypto world, even considered a "scam." So, for someone who just had a taste of the crypto world, an "outsider" to the crypto definition like her, I was curious to know how she viewed such opinions and whether she thought these investments were failures.
Her response was:
Of course not. Before buying, I had no knowledge or interest in the crypto world, but NFTs, the metaverse, DAOs were the trends at that time. I felt that if I didn't participate, I would be left behind. I know my NFT has since dropped significantly, but I have hardly paid attention since then, and I do not consider it a failed investment. It's like the Pentium computer my family bought me in my childhood; who would say that buying a computer back then was a failed action just because the Pentium processor became outdated over time?
I said that this example was not quite right because buying a computer is consumption, whereas buying NFTs, metaverse land is an investment. She smiled and said that at least for her, NFTs and metaverse land are not investments but consumption. Because investments are rational and are not driven by novelty and trendy emotional factors, and investments cannot bring about a sense of novelty and trendiness.
Blockchain belongs to young people, Web3 belongs to young people. We can use it to change the world or create a world of our own. But now, the crypto world is rapidly losing this kind of appeal.
Belief cannot make money, so all that's left is the belief in making money
The current crypto world is struggling in the myth of "out of ideas" and disillusionment, and is sinking.
What can blockchain technology really do? In the years of the cryptocurrency industry's development history, endless new narratives have provided a constant source of energy for industry development, allowing the cryptocurrency's "dream market" pace to be maintained. From the legendary story of buying 2 pizzas with 10,000 Bitcoins, which spontaneously established the value of a new generation of currency, to the Ethereum ICO frenzy that transformed blockchain into a new, decentralized asset issuance and financing platform, and then to DeFi (Decentralized Finance) elevating blockchain to a bank that can perform a series of financial operations such as lending and leverage, and to the emergence of "consumer-grade applications" such as NFTs, the metaverse, games, and more.
Blockchain has the power to change the world, and cryptocurrency has the power to change the world. As long as one holds such a belief, stays in this community with a curiosity for all new technological innovations, one will eventually find their opportunity and reap their rewards. Once, many young people were attracted by the vitality of cryptocurrency, immersing themselves in the crypto wave as brave trendsetters of their time, transforming their lives in the marvelous cryptocurrency journey.
From the end of 2021 to 2022, stars from around the world rushed to buy or even personally issue NFTs, Facebook rebranded to Meta diving into the metaverse, aiming to buy a copy of the U.S. Constitution, purchase an NBA team, acquire an island to build a utopia, and various DAOs (Decentralized Autonomous Organizations) sprouted up like mushrooms after the rain. In my mind, this is the "Golden Age" of blockchain, or rather Web3. In 2022, in Dali, there was a very lively and "artistic" Web3 street party organized by a small group, gradually expanding from two or three members of the local youth community to around thirty to nearly one hundred people, completing it in a very decentralized manner powered by passion.
Also in 2022, the "Leap Sea" Tavern, which later received tens of millions of yuan in angel investment, gained more attention due to its unique "Web3" features. Liang You, the owner of this tavern, said in an interview at the time that he was not an insider of the Web3 circle, but the organizational structure of the "Leap Sea" Tavern adopted the DAO model from Web3 and even released the first domestic collaborative beer with the Bored Ape Yacht Club.
Twitter is the most active social media platform in the crypto community. In the past, you could see various cryptocurrency industry analyses and insights into the industry's development directions or debates. Nowadays, such content has lost its appeal and has become scarce. In its place are posts about what Binance founder CZ's dog is named, success tips from various "crypto gods," and discussions about "college girls" and "business K."
This change reflects the direct result of the crypto community falling into the misconception of "value innovation" and having their "dao hearts shattered." As the U.S. government becomes increasingly crypto-friendly, the community naturally rejoices but also feels anxious about "this being the last bull market." Initially, when NFTs, "digital luxury goods," or metaverse land, "digital real estate dreams," experienced a downturn, the community blamed the project teams for not doing well enough. Gradually, they stopped complaining and became indifferent, sneering at various narratives.
In this disillusionment, exchanges, market makers, and KOLs have become the most dominant forces in the crypto world. If a coin can be listed on an exchange, it means there can be enough users, not transacting on the blockchain, participating. If a coin has a market maker behind it, it means there is funding to "set up the game," artificially creating price trends to liven up the "game." In the crypto world, these "game setups" are often referred to as "conspiracy groups." If a coin has KOL participation, it means that KOL must also cheer for their holdings, with the most influential KOLs being called the "front row," even if they do not directly promote on Twitter, some will track their on-chain behavior to buy in.
Recently, at the Consensus 2025 conference just concluded in Hong Kong, many crypto people self-mockingly noted that although the conference was named "Consensus Conference," it seems that those seeking consensus did not find it. During the conference, project teams were still able to spare no expense, renting various high-end venues to hold exquisite events, even spending HKD 600,000 in one night on drinks.
However, the revelry does not eliminate the confusion and anxiety in the crypto world about "where are we heading." In the crypto world, without the fairy tale that belief can bring profits, only the belief in making money remains.
The "Nasdaq"-ization of the Crypto World, the Original Sin of the "Second Crypto Religion"
As the crypto world began subconsciously analogizing itself to the decentralized "Nasdaq," the schism of cryptocurrency, the world's largest "cyber religion," had already begun to show.
The value of cryptocurrency can be interpreted in different ways by different people, with the most common perspective possibly starting from finance. But in my view, the value of cryptocurrency has always been the value of belief, the value of the "cyber religion."
From buying 2 pizzas with 10,000 Bitcoins, to becoming "dark web currency," to becoming the legal tender of El Salvador, and further to the U.S. establishing a Bitcoin strategic reserve. One great achievement after another cannot be planned, nor can it be predicted. It is the belief of people around the world in Bitcoin that has allowed this "cyber religion" to undergo a magnificent 16 years. If no one truly believed from the bottom of their hearts that Bitcoin would become the world's currency in the future, if no one believed that Satoshi Nakamoto would never touch the roughly 1 million Bitcoins they owned, Bitcoin would never have steadily developed to where it is today.
The "Nasdaq"-ization of the crypto world began with the birth of Ethereum. This was actually the first split of the "cyber religion," the formal formation of the "Second Crypto Religion." Bitcoin purists adhere to the "currency" positioning and do not want the Bitcoin blockchain to pursue more capabilities at the expense of even a little security, stability, or decentralization. Bitcoin believers believe in the intrinsic value of Bitcoin itself, while Ethereum believers believe they can and should create more value.
“Bitcoin is gold, Ethereum is silver.” Through new blockchain technologies such as ICOs, DeFi, NFTs, the Metaverse, blockchain games, and more, Ethereum has steadily climbed to its peak, ultimately winning such a position in the hearts of the crypto community. Ethereum's founder, Vitalik Buterin, also soared to fame at that time, becoming the second “god” in the crypto world after Satoshi Nakamoto.
However, in reality, the “Second Crypto Religion” was never quite stable from the beginning. Because whether gold or silver, the world does not need these two precious metals to present their “what can they do” answer sheet to prove their value. From this perspective, Bitcoin can fully rival gold, but Ethereum cannot be compared to silver. Since Ethereum's inception, Ethereum has been on a path that constantly requires validation of its value, much like our helpless lives, always needing to present an answer sheet.
Rather than calling Vitalik Buterin a “god,” it is more accurate to say he is the Steve Jobs of the crypto world. Now, his situation seems to be echoing the early days of Steve Jobs. In 1985, Apple faced declining performance due to competition from IBM. Steve Jobs was ousted from the Apple board of directors due to disagreements with most of the management. Nearly 20 years later, Ethereum faced declining performance due to competition from Solana. When Vitalik Buterin expressed that he would not proactively engage with governments for “surrender” as a positive move, he transitioned from being the “V God” to the “V Dog.”
On the crowdfunding platform Kickstarter, many games have gone through a long period from fundraising to final development and delivery. “Star Citizen” has been in the alpha testing phase for over 12 years. However, in the highly speculative cryptocurrency market, Vitalik Buterin cannot receive such enduring patience from the market.
However, whether the various new blockchain technology explorations that have taken place on Ethereum can truly “take off” and be useful depends on a combination of timing, opportunity, and people. Taking NFTs as an example, from the birth of CryptoPunks to the explosion of NFTs took about four years. If NFTs have enabled blockchain technology to find a new application direction in “new art medium,” computer-generated art through the computer vision (art) algorithm has its origins in the 1950s. It took about 70 years before blockchain technology endowed this art category with uniqueness and traceability, finding the perfect form of presentation. After all, if the images generated by computer algorithms are simply printed out using a printer, their charm would undoubtedly be greatly diminished.
Why Did the Cryptocurrency Community Lose Patience This Time?
A Real Bull Market or a Fake One?
Because Bitcoin hit a new all-time high last year.
In the cryptocurrency community, the term "familiarity bias" is used to specifically refer to referencing past bullish experiences to capture the next major upward trend. One of the iron laws of "familiarity bias" is that each Bitcoin halving, which occurs every 4 years, will kick off a major bull run. Bitcoin is expected to rise and hit a new all-time high, then consolidate at a high level, while Ethereum-led "altcoins" will take center stage in the bull market's "second half," and various new blockchain technology narratives will bring forth one after another wealth myth of tens to hundreds of times returns.
When Bitcoin hit a new all-time high again last year, the cryptocurrency community still believed in this iron law. What sets this round apart from previous bull markets is that this time, the community is more anxious. This anxiety still stems from a loss of faith—the U.S. government even stepped in to "buy the dip," and moving forward, the opportunities left for retail investors will become fewer and fewer.
For most people in the cryptocurrency community, Bitcoin's new all-time high does not directly translate into profits because Bitcoin's market cap is too large, making it difficult to achieve financial freedom through Bitcoin investments quickly. What people are hoping for is the frenzy of "altcoins" after Bitcoin's new all-time high.
Interestingly, there are actually no objective conditions this time around to replicate the frenzy of "altcoins." First, the funds buying Bitcoin spot ETFs are actually active in the traditional financial markets and do not directly enter the on-chain activities, such as DeFi, NFTs, metaverse, as was the case in the past. Second, there hasn't been a new, refreshing, unified native crypto narrative within the community, let alone one that can attract attention and participation from outside the community.
However, after waiting patiently for 3 years, is this the result everyone was expecting? The cryptocurrency community is unwilling to accept this outcome. This "unwillingness" has formed a false bull market, and insiders refer to this market situation as "PvP"—in the previous bull market, everyone spread the new narrative with a shared passion and vision, and the Web3 concept even spread to some non-blockchain industries. This time, there is no consensus on the new narrative; everyone just wants to be a "smart person" and achieve victory by profiting from others' losses.
This situation closely resembles the ending of "Alice, the Last Time of Her Empire"—a series of tough survival games created by those on the brink of death from a natural disaster of asteroid impact, all coming together to create a hallucination.
For the "cyber religion," this is a very bad situation that reveals a very dangerous sign—the cryptocurrency community, in confusion and loss, in the anxiety of making money, has willingly stripped away the idealism and sacredness of the cryptocurrency community.
Pessimistic Honesty is Actually Helplessness Self-Abasement
The crypto community has started calling cryptocurrency a "casino."
Last year, I met up with a friend I had known for a while offline, who specializes in trading meme coins. Meme coins were his entry point into the cryptocurrency market, and it was almost the only track he was interested in within the cryptocurrency market.
"I just find this thing fun, something our generation plays with. Meme coins, or even if you take out the word 'coin,' this kind of thing is whimsical, not well understood in reality but in the cryptocurrency market, everyone recognizes this thing, this culture. When I discovered that I could make money based on my sense of these contents or aesthetic, I thought meme coins were really cool and fun."
After he finished speaking, we both took a big gulp of our drinks. As alcohol spread through my body, memories of those meme coins that had once excited me quickly flashed through my mind, such as $DOGE derived from that globally renowned Shiba Inu meme, repeatedly mentioned by Musk, $PEOPLE, which had a huge pump to fund the purchase of a copy of the U.S. Constitution...
But now, even the "fun" that was once the key to meme coins has almost malfunctioned. Setting everything aside, closing my eyes, only one word remains:
"Gamble"
Solana, the most vibrant "crypto casino" of this fake bull market, has seen over 640,000 meme coins appear since April 1st last year, and this data was only up to early July last year. In other words, in a span of three months, over 7,000 new meme coins were appearing on Solana on average every day.
The disappearance of "cyber religious believers" corresponds to the emergence of "crypto gamblers." These "crypto gamblers" post a series of English and number-laden "addresses" on various chat apps every day, which is referred to as "CA," meaning the token's contract address. With this address, they can precisely locate the token they need to trade.
"Smart money" and "dev" are the key success factors that "crypto gamblers" care most about. "Smart money" is equivalent to the "crypto gambling god." These addresses on the blockchain are sought after in daily transactions due to their high win rates, and their trading actions attract many "crypto gamblers" to follow suit with buy-ins. "Dev" is the abbreviation for "developer," referring to the creators of the tokens. "Crypto gamblers" need a relatively reliable "game initiator" to participate and try to avoid participating in games initiated by token creators with a history of massive sell-offs right after the start.
Objectively speaking, the most prominent narrative of wealth creation during this fake bull run has been the "Crypto Casino" narrative. However, what was originally meant to be a helpless, honest reflection of the current state of affairs has ultimately turned into a numb and self-righteous stance.
This is the most severe challenge that the "cyber-religion" of cryptocurrency has faced to date—a time when the industry's idealism and sanctity have been fractured. No one knows when or how this fracture will be healed.
Can this fracture even be healed?
The consensus of cryptocurrency is not unbreakable; it needs to continue to evolve
The most significant value created by the coin circle's "New Narrative," born out of blockchain technological innovation attempts, lies in presenting the "cyber-religion" in a more diverse light to the world, allowing more individuals to become interested in and gain a deeper understanding of cryptocurrency through different perspectives. Previously, this was in a positive feedback loop with cryptocurrency price growth, but now, it has become detached.
The rise in cryptocurrency prices serves more to reinforce the beliefs of existing "disciples." The astounding wealth narratives created by cryptocurrency do not directly aid in the "preaching" of cryptocurrency.
Does the coin circle need a new narrative? Yes. Is there a rush? Not really. The world is constantly evolving, and technological advancements will bring forth a continuous stream of new demands. It is highly likely that tomorrow or even later today, the answer to "What else can blockchain do" will naturally emerge. Even if not, has the original narrative been good enough? No, it can still be improved upon, and there is still a need for further exploration.
If cryptocurrency is merely a "casino," just a speculator's paradise, then its doomsday clock has already started ticking. How the coin circle views this industry will determine how it presents itself to the world.
Perhaps the current generation of young people still finds cryptocurrency cool, but what about the next generation, and the one after that? How will they perceive cryptocurrency?
I do not know, my friend, the answer is blowing in the wind.
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China's Central Bank and Eight Other Departments' Latest Regulatory Focus: Key Attention to RWA Tokenized Asset Risk
Foreword: Today, the People's Bank of China's website published the "Notice of the People's Bank of China, National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public Security, State Administration for Market Regulation, China Banking and Insurance Regulatory Commission, China Securities Regulatory Commission, State Administration of Foreign Exchange on Further Preventing and Dealing with Risks Related to Virtual Currency and Others (Yinfa [2026] No. 42)", the latest regulatory requirements from the eight departments including the central bank, which are basically consistent with the regulatory requirements of recent years. The main focus of the regulation is on speculative activities such as virtual currency trading, exchanges, ICOs, overseas platform services, and this time, regulatory oversight of RWA has been added, explicitly prohibiting RWA tokenization, stablecoins (especially those pegged to the RMB). The following is the full text:
To the people's governments of all provinces, autonomous regions, and municipalities directly under the Central Government, the Xinjiang Production and Construction Corps:
Recently, there have been speculative activities related to virtual currency and Real-World Assets (RWA) tokenization, disrupting the economic and financial order and jeopardizing the property security of the people. In order to further prevent and address the risks related to virtual currency and Real-World Assets tokenization, effectively safeguard national security and social stability, in accordance with the "Law of the People's Republic of China on the People's Bank of China," "Law of the People's Republic of China on Commercial Banks," "Securities Law of the People's Republic of China," "Law of the People's Republic of China on Securities Investment Funds," "Law of the People's Republic of China on Futures and Derivatives," "Cybersecurity Law of the People's Republic of China," "Regulations of the People's Republic of China on the Administration of Renminbi," "Regulations on Prevention and Disposal of Illegal Fundraising," "Regulations of the People's Republic of China on Foreign Exchange Administration," "Telecommunications Regulations of the People's Republic of China," and other provisions, after reaching consensus with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, and with the approval of the State Council, the relevant matters are notified as follows:
(I) Virtual currency does not possess the legal status equivalent to fiat currency. Virtual currencies such as Bitcoin, Ether, Tether, etc., have the main characteristics of being issued by non-monetary authorities, using encryption technology and distributed ledger or similar technology, existing in digital form, etc. They do not have legal tender status, should not and cannot be circulated and used as currency in the market.
The business activities related to virtual currency are classified as illegal financial activities. The exchange of fiat currency and virtual currency within the territory, exchange of virtual currencies, acting as a central counterparty in buying and selling virtual currencies, providing information intermediary and pricing services for virtual currency transactions, token issuance financing, and trading of virtual currency-related financial products, etc., fall under illegal financial activities, such as suspected illegal issuance of token vouchers, unauthorized public issuance of securities, illegal operation of securities and futures business, illegal fundraising, etc., are strictly prohibited across the board and resolutely banned in accordance with the law. Overseas entities and individuals are not allowed to provide virtual currency-related services to domestic entities in any form.
A stablecoin pegged to a fiat currency indirectly fulfills some functions of the fiat currency in circulation. Without the consent of relevant authorities in accordance with the law and regulations, any domestic or foreign entity or individual is not allowed to issue a RMB-pegged stablecoin overseas.
（II）Tokenization of Real-World Assets refers to the use of encryption technology and distributed ledger or similar technologies to transform ownership rights, income rights, etc., of assets into tokens (tokens) or other interests or bond certificates with token (token) characteristics, and carry out issuance and trading activities.
Engaging in the tokenization of real-world assets domestically, as well as providing related intermediary, information technology services, etc., which are suspected of illegal issuance of token vouchers, unauthorized public offering of securities, illegal operation of securities and futures business, illegal fundraising, and other illegal financial activities, shall be prohibited; except for relevant business activities carried out with the approval of the competent authorities in accordance with the law and regulations and relying on specific financial infrastructures. Overseas entities and individuals are not allowed to illegally provide services related to the tokenization of real-world assets to domestic entities in any form.
(III) Inter-agency Coordination. The People's Bank of China, together with the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Public Security, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, the State Administration of Foreign Exchange, and other departments, will improve the work mechanism, strengthen coordination with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, coordinate efforts, and overall guide regions to carry out risk prevention and disposal of virtual currency-related illegal financial activities.
The China Securities Regulatory Commission, together with the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Public Security, the People's Bank of China, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the State Administration of Foreign Exchange, and other departments, will improve the work mechanism, strengthen coordination with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, coordinate efforts, and overall guide regions to carry out risk prevention and disposal of illegal financial activities related to the tokenization of real-world assets.
(IV) Strengthening Local Implementation. The people's governments at the provincial level are overall responsible for the prevention and disposal of risks related to virtual currencies and the tokenization of real-world assets in their respective administrative regions. The specific leading department is the local financial regulatory department, with participation from branches and dispatched institutions of the State Council's financial regulatory department, telecommunications regulators, public security, market supervision, and other departments, in coordination with cyberspace departments, courts, and procuratorates, to improve the normalization of the work mechanism, effectively connect with the relevant work mechanisms of central departments, form a cooperative and coordinated working pattern between central and local governments, effectively prevent and properly handle risks related to virtual currencies and the tokenization of real-world assets, and maintain economic and financial order and social stability.
(5) Enhanced Risk Monitoring. The People's Bank of China, China Securities Regulatory Commission, National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public Security, State Administration of Foreign Exchange, Cyberspace Administration of China, and other departments continue to improve monitoring techniques and system support, enhance cross-departmental data analysis and sharing, establish sound information sharing and cross-validation mechanisms, promptly grasp the risk situation of activities related to virtual currency and real-world asset tokenization. Local governments at all levels give full play to the role of local monitoring and early warning mechanisms. Local financial regulatory authorities, together with branches and agencies of the State Council's financial regulatory authorities, as well as departments of cyberspace and public security, ensure effective connection between online monitoring, offline investigation, and fund tracking, efficiently and accurately identify activities related to virtual currency and real-world asset tokenization, promptly share risk information, improve early warning information dissemination, verification, and rapid response mechanisms.
(6) Strengthened Oversight of Financial Institutions, Intermediaries, and Technology Service Providers. Financial institutions (including non-bank payment institutions) are prohibited from providing account opening, fund transfer, and clearing services for virtual currency-related business activities, issuing and selling financial products related to virtual currency, including virtual currency and related financial products in the scope of collateral, conducting insurance business related to virtual currency, or including virtual currency in the scope of insurance liability. Financial institutions (including non-bank payment institutions) are prohibited from providing custody, clearing, and settlement services for unauthorized real-world asset tokenization-related business and related financial products. Relevant intermediary institutions and information technology service providers are prohibited from providing intermediary, technical, or other services for unauthorized real-world asset tokenization-related businesses and related financial products.
(7) Enhanced Management of Internet Information Content and Access. Internet enterprises are prohibited from providing online business venues, commercial displays, marketing, advertising, or paid traffic diversion services for virtual currency and real-world asset tokenization-related business activities. Upon discovering clues of illegal activities, they should promptly report to relevant departments and provide technical support and assistance for related investigations and inquiries. Based on the clues transferred by the financial regulatory authorities, the cyberspace administration, telecommunications authorities, and public security departments should promptly close and deal with websites, mobile applications (including mini-programs), and public accounts engaged in virtual currency and real-world asset tokenization-related business activities in accordance with the law.
(8) Strengthened Entity Registration and Advertisement Management. Market supervision departments strengthen entity registration and management, and enterprise and individual business registrations must not contain terms such as "virtual currency," "virtual asset," "cryptocurrency," "crypto asset," "stablecoin," "real-world asset tokenization," or "RWA" in their names or business scopes. Market supervision departments, together with financial regulatory authorities, legally enhance the supervision of advertisements related to virtual currency and real-world asset tokenization, promptly investigating and handling relevant illegal advertisements.
（IX） Continued Rectification of Virtual Currency Mining Activities. The National Development and Reform Commission, together with relevant departments, strictly controls virtual currency mining activities, continuously promotes the rectification of virtual currency mining activities. The people's governments of various provinces take overall responsibility for the rectification of "mining" within their respective administrative regions. In accordance with the requirements of the National Development and Reform Commission and other departments in the "Notice on the Rectification of Virtual Currency Mining Activities" (NDRC Energy-saving Building [2021] No. 1283) and the provisions of the "Guidance Catalog for Industrial Structure Adjustment (2024 Edition)," a comprehensive review, investigation, and closure of existing virtual currency mining projects are conducted, new mining projects are strictly prohibited, and mining machine production enterprises are strictly prohibited from providing mining machine sales and other services within the country.
（X） Severe Crackdown on Related Illegal Financial Activities. Upon discovering clues to illegal financial activities related to virtual currency and the tokenization of real-world assets, local financial regulatory authorities, branches of the State Council's financial regulatory authorities, and other relevant departments promptly investigate, determine, and properly handle the issues in accordance with the law, and seriously hold the relevant entities and individuals legally responsible. Those suspected of crimes are transferred to the judicial authorities for processing according to the law.
（XI） Severe Crackdown on Related Illegal and Criminal Activities. The Ministry of Public Security, the People's Bank of China, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, as well as judicial and procuratorial organs, in accordance with their respective responsibilities, rigorously crack down on illegal and criminal activities related to virtual currency, the tokenization of real-world assets, such as fraud, money laundering, illegal business operations, pyramid schemes, illegal fundraising, and other illegal and criminal activities carried out under the guise of virtual currency, the tokenization of real-world assets, etc.
（XII） Strengthen Industry Self-discipline. Relevant industry associations should enhance membership management and policy advocacy, based on their own responsibilities, advocate and urge member units to resist illegal financial activities related to virtual currency and the tokenization of real-world assets. Member units that violate regulatory policies and industry self-discipline rules are to be disciplined in accordance with relevant self-regulatory management regulations. By leveraging various industry infrastructure, conduct risk monitoring related to virtual currency, the tokenization of real-world assets, and promptly transfer issue clues to relevant departments.
（XIII） Without the approval of relevant departments in accordance with the law and regulations, domestic entities and foreign entities controlled by them may not issue virtual currency overseas.
（XIV） Domestic entities engaging directly or indirectly in overseas external debt-based tokenization of real-world assets, or conducting asset securitization activities abroad based on domestic ownership rights, income rights, etc. (hereinafter referred to as domestic equity), should be strictly regulated in accordance with the principles of "same business, same risk, same rules." The National Development and Reform Commission, the China Securities Regulatory Commission, the State Administration of Foreign Exchange, and other relevant departments regulate it according to their respective responsibilities. For other forms of overseas real-world asset tokenization activities based on domestic equity by domestic entities, the China Securities Regulatory Commission, together with relevant departments, supervise according to their division of responsibilities. Without the consent and filing of relevant departments, no unit or individual may engage in the above-mentioned business.
(15) Overseas subsidiaries and branches of domestic financial institutions providing Real World Asset Tokenization-related services overseas shall do so legally and prudently. They shall have professional personnel and systems in place to effectively mitigate business risks, strictly implement customer onboarding, suitability management, anti-money laundering requirements, and incorporate them into the domestic financial institutions' compliance and risk management system. Intermediaries and information technology service providers offering Real World Asset Tokenization services abroad based on domestic equity or conducting Real World Asset Tokenization business in the form of overseas debt for domestic entities directly or indirectly venturing abroad must strictly comply with relevant laws and regulations. They should establish and improve relevant compliance and internal control systems in accordance with relevant normative requirements, strengthen business and risk control, and report the business developments to the relevant regulatory authorities for approval or filing.
(16) Strengthen organizational leadership and overall coordination. All departments and regions should attach great importance to the prevention of risks related to virtual currencies and Real World Asset Tokenization, strengthen organizational leadership, clarify work responsibilities, form a long-term effective working mechanism with centralized coordination, local implementation, and shared responsibilities, maintain high pressure, dynamically monitor risks, effectively prevent and mitigate risks in an orderly and efficient manner, legally protect the property security of the people, and make every effort to maintain economic and financial order and social stability.
(17) Widely carry out publicity and education. All departments, regions, and industry associations should make full use of various media and other communication channels to disseminate information through legal and policy interpretation, analysis of typical cases, and education on investment risks, etc. They should promote the illegality and harm of virtual currencies and Real World Asset Tokenization-related businesses and their manifestations, fully alert to potential risks and hidden dangers, and enhance public awareness and identification capabilities for risk prevention.
(18) Engaging in illegal financial activities related to virtual currencies and Real World Asset Tokenization in violation of this notice, as well as providing services for virtual currencies and Real World Asset Tokenization-related businesses, shall be punished in accordance with relevant regulations. If it constitutes a crime, criminal liability shall be pursued according to the law. For domestic entities and individuals who knowingly or should have known that overseas entities illegally provided virtual currency or Real World Asset Tokenization-related services to domestic entities and still assisted them, relevant responsibilities shall be pursued according to the law. If it constitutes a crime, criminal liability shall be pursued according to the law.
(19) If any unit or individual invests in virtual currencies, Real World Asset Tokens, and related financial products against public order and good customs, the relevant civil legal actions shall be invalid, and any resulting losses shall be borne by them. If there are suspicions of disrupting financial order and jeopardizing financial security, the relevant departments shall deal with them according to the law.
This notice shall enter into force upon the date of its issuance. The People's Bank of China and ten other departments' "Notice on Further Preventing and Dealing with the Risks of Virtual Currency Trading Speculation" (Yinfa [2021] No. 237) is hereby repealed.
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Foreword: Today, the People's Bank of China's website published the "Notice of the People's Bank of China, National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public Security, State Administration for Market Regulation, China Banking and Insurance Regulatory Commission, China Securities Regulatory Commission, State Administration of Foreign Exchange on Further Preventing and Dealing with Risks Related to Virtual Currency and Others (Yinfa [2026] No. 42)", the latest regulatory requirements from the eight departments including the central bank, which are basically consistent with the regulatory requirements of recent years. The main focus of the regulation is on speculative activities such as virtual currency trading, exchanges, ICOs, overseas platform services, and this time, regulatory oversight of RWA has been added, explicitly prohibiting RWA tokenization, stablecoins (especially those pegged to the RMB). The following is the full text:
To the people's governments of all provinces, autonomous regions, and municipalities directly under the Central Government, the Xinjiang Production and Construction Corps:
Recently, there have been speculative activities related to virtual currency and Real-World Assets (RWA) tokenization, disrupting the economic and financial order and jeopardizing the property security of the people. In order to further prevent and address the risks related to virtual currency and Real-World Assets tokenization, effectively safeguard national security and social stability, in accordance with the "Law of the People's Republic of China on the People's Bank of China," "Law of the People's Republic of China on Commercial Banks," "Securities Law of the People's Republic of China," "Law of the People's Republic of China on Securities Investment Funds," "Law of the People's Republic of China on Futures and Derivatives," "Cybersecurity Law of the People's Republic of China," "Regulations of the People's Republic of China on the Administration of Renminbi," "Regulations on Prevention and Disposal of Illegal Fundraising," "Regulations of the People's Republic of China on Foreign Exchange Administration," "Telecommunications Regulations of the People's Republic of China," and other provisions, after reaching consensus with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, and with the approval of the State Council, the relevant matters are notified as follows:
(I) Virtual currency does not possess the legal status equivalent to fiat currency. Virtual currencies such as Bitcoin, Ether, Tether, etc., have the main characteristics of being issued by non-monetary authorities, using encryption technology and distributed ledger or similar technology, existing in digital form, etc. They do not have legal tender status, should not and cannot be circulated and used as currency in the market.
The business activities related to virtual currency are classified as illegal financial activities. The exchange of fiat currency and virtual currency within the territory, exchange of virtual currencies, acting as a central counterparty in buying and selling virtual currencies, providing information intermediary and pricing services for virtual currency transactions, token issuance financing, and trading of virtual currency-related financial products, etc., fall under illegal financial activities, such as suspected illegal issuance of token vouchers, unauthorized public issuance of securities, illegal operation of securities and futures business, illegal fundraising, etc., are strictly prohibited across the board and resolutely banned in accordance with the law. Overseas entities and individuals are not allowed to provide virtual currency-related services to domestic entities in any form.
A stablecoin pegged to a fiat currency indirectly fulfills some functions of the fiat currency in circulation. Without the consent of relevant authorities in accordance with the law and regulations, any domestic or foreign entity or individual is not allowed to issue a RMB-pegged stablecoin overseas.
（II）Tokenization of Real-World Assets refers to the use of encryption technology and distributed ledger or similar technologies to transform ownership rights, income rights, etc., of assets into tokens (tokens) or other interests or bond certificates with token (token) characteristics, and carry out issuance and trading activities.
Engaging in the tokenization of real-world assets domestically, as well as providing related intermediary, information technology services, etc., which are suspected of illegal issuance of token vouchers, unauthorized public offering of securities, illegal operation of securities and futures business, illegal fundraising, and other illegal financial activities, shall be prohibited; except for relevant business activities carried out with the approval of the competent authorities in accordance with the law and regulations and relying on specific financial infrastructures. Overseas entities and individuals are not allowed to illegally provide services related to the tokenization of real-world assets to domestic entities in any form.
(III) Inter-agency Coordination. The People's Bank of China, together with the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Public Security, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, the State Administration of Foreign Exchange, and other departments, will improve the work mechanism, strengthen coordination with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, coordinate efforts, and overall guide regions to carry out risk prevention and disposal of virtual currency-related illegal financial activities.
The China Securities Regulatory Commission, together with the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Public Security, the People's Bank of China, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the State Administration of Foreign Exchange, and other departments, will improve the work mechanism, strengthen coordination with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, coordinate efforts, and overall guide regions to carry out risk prevention and disposal of illegal financial activities related to the tokenization of real-world assets.
(IV) Strengthening Local Implementation. The people's governments at the provincial level are overall responsible for the prevention and disposal of risks related to virtual currencies and the tokenization of real-world assets in their respective administrative regions. The specific leading department is the local financial regulatory department, with participation from branches and dispatched institutions of the State Council's financial regulatory department, telecommunications regulators, public security, market supervision, and other departments, in coordination with cyberspace departments, courts, and procuratorates, to improve the normalization of the work mechanism, effectively connect with the relevant work mechanisms of central departments, form a cooperative and coordinated working pattern between central and local governments, effectively prevent and properly handle risks related to virtual currencies and the tokenization of real-world assets, and maintain economic and financial order and social stability.
(5) Enhanced Risk Monitoring. The People's Bank of China, China Securities Regulatory Commission, National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public Security, State Administration of Foreign Exchange, Cyberspace Administration of China, and other departments continue to improve monitoring techniques and system support, enhance cross-departmental data analysis and sharing, establish sound information sharing and cross-validation mechanisms, promptly grasp the risk situation of activities related to virtual currency and real-world asset tokenization. Local governments at all levels give full play to the role of local monitoring and early warning mechanisms. Local financial regulatory authorities, together with branches and agencies of the State Council's financial regulatory authorities, as well as departments of cyberspace and public security, ensure effective connection between online monitoring, offline investigation, and fund tracking, efficiently and accurately identify activities related to virtual currency and real-world asset tokenization, promptly share risk information, improve early warning information dissemination, verification, and rapid response mechanisms.
(6) Strengthened Oversight of Financial Institutions, Intermediaries, and Technology Service Providers. Financial institutions (including non-bank payment institutions) are prohibited from providing account opening, fund transfer, and clearing services for virtual currency-related business activities, issuing and selling financial products related to virtual currency, including virtual currency and related financial products in the scope of collateral, conducting insurance business related to virtual currency, or including virtual currency in the scope of insurance liability. Financial institutions (including non-bank payment institutions) are prohibited from providing custody, clearing, and settlement services for unauthorized real-world asset tokenization-related business and related financial products. Relevant intermediary institutions and information technology service providers are prohibited from providing intermediary, technical, or other services for unauthorized real-world asset tokenization-related businesses and related financial products.
(7) Enhanced Management of Internet Information Content and Access. Internet enterprises are prohibited from providing online business venues, commercial displays, marketing, advertising, or paid traffic diversion services for virtual currency and real-world asset tokenization-related business activities. Upon discovering clues of illegal activities, they should promptly report to relevant departments and provide technical support and assistance for related investigations and inquiries. Based on the clues transferred by the financial regulatory authorities, the cyberspace administration, telecommunications authorities, and public security departments should promptly close and deal with websites, mobile applications (including mini-programs), and public accounts engaged in virtual currency and real-world asset tokenization-related business activities in accordance with the law.
(8) Strengthened Entity Registration and Advertisement Management. Market supervision departments strengthen entity registration and management, and enterprise and individual business registrations must not contain terms such as "virtual currency," "virtual asset," "cryptocurrency," "crypto asset," "stablecoin," "real-world asset tokenization," or "RWA" in their names or business scopes. Market supervision departments, together with financial regulatory authorities, legally enhance the supervision of advertisements related to virtual currency and real-world asset tokenization, promptly investigating and handling relevant illegal advertisements.
（IX） Continued Rectification of Virtual Currency Mining Activities. The National Development and Reform Commission, together with relevant departments, strictly controls virtual currency mining activities, continuously promotes the rectification of virtual currency mining activities. The people's governments of various provinces take overall responsibility for the rectification of "mining" within their respective administrative regions. In accordance with the requirements of the National Development and Reform Commission and other departments in the "Notice on the Rectification of Virtual Currency Mining Activities" (NDRC Energy-saving Building [2021] No. 1283) and the provisions of the "Guidance Catalog for Industrial Structure Adjustment (2024 Edition)," a comprehensive review, investigation, and closure of existing virtual currency mining projects are conducted, new mining projects are strictly prohibited, and mining machine production enterprises are strictly prohibited from providing mining machine sales and other services within the country.
（X） Severe Crackdown on Related Illegal Financial Activities. Upon discovering clues to illegal financial activities related to virtual currency and the tokenization of real-world assets, local financial regulatory authorities, branches of the State Council's financial regulatory authorities, and other relevant departments promptly investigate, determine, and properly handle the issues in accordance with the law, and seriously hold the relevant entities and individuals legally responsible. Those suspected of crimes are transferred to the judicial authorities for processing according to the law.
（XI） Severe Crackdown on Related Illegal and Criminal Activities. The Ministry of Public Security, the People's Bank of China, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, as well as judicial and procuratorial organs, in accordance with their respective responsibilities, rigorously crack down on illegal and criminal activities related to virtual currency, the tokenization of real-world assets, such as fraud, money laundering, illegal business operations, pyramid schemes, illegal fundraising, and other illegal and criminal activities carried out under the guise of virtual currency, the tokenization of real-world assets, etc.
（XII） Strengthen Industry Self-discipline. Relevant industry associations should enhance membership management and policy advocacy, based on their own responsibilities, advocate and urge member units to resist illegal financial activities related to virtual currency and the tokenization of real-world assets. Member units that violate regulatory policies and industry self-discipline rules are to be disciplined in accordance with relevant self-regulatory management regulations. By leveraging various industry infrastructure, conduct risk monitoring related to virtual currency, the tokenization of real-world assets, and promptly transfer issue clues to relevant departments.
（XIII） Without the approval of relevant departments in accordance with the law and regulations, domestic entities and foreign entities controlled by them may not issue virtual currency overseas.
（XIV） Domestic entities engaging directly or indirectly in overseas external debt-based tokenization of real-world assets, or conducting asset securitization activities abroad based on domestic ownership rights, income rights, etc. (hereinafter referred to as domestic equity), should be strictly regulated in accordance with the principles of "same business, same risk, same rules." The National Development and Reform Commission, the China Securities Regulatory Commission, the State Administration of Foreign Exchange, and other relevant departments regulate it according to their respective responsibilities. For other forms of overseas real-world asset tokenization activities based on domestic equity by domestic entities, the China Securities Regulatory Commission, together with relevant departments, supervise according to their division of responsibilities. Without the consent and filing of relevant departments, no unit or individual may engage in the above-mentioned business.
(15) Overseas subsidiaries and branches of domestic financial institutions providing Real World Asset Tokenization-related services overseas shall do so legally and prudently. They shall have professional personnel and systems in place to effectively mitigate business risks, strictly implement customer onboarding, suitability management, anti-money laundering requirements, and incorporate them into the domestic financial institutions' compliance and risk management system. Intermediaries and information technology service providers offering Real World Asset Tokenization services abroad based on domestic equity or conducting Real World Asset Tokenization business in the form of overseas debt for domestic entities directly or indirectly venturing abroad must strictly comply with relevant laws and regulations. They should establish and improve relevant compliance and internal control systems in accordance with relevant normative requirements, strengthen business and risk control, and report the business developments to the relevant regulatory authorities for approval or filing.
(16) Strengthen organizational leadership and overall coordination. All departments and regions should attach great importance to the prevention of risks related to virtual currencies and Real World Asset Tokenization, strengthen organizational leadership, clarify work responsibilities, form a long-term effective working mechanism with centralized coordination, local implementation, and shared responsibilities, maintain high pressure, dynamically monitor risks, effectively prevent and mitigate risks in an orderly and efficient manner, legally protect the property security of the people, and make every effort to maintain economic and financial order and social stability.
(17) Widely carry out publicity and education. All departments, regions, and industry associations should make full use of various media and other communication channels to disseminate information through legal and policy interpretation, analysis of typical cases, and education on investment risks, etc. They should promote the illegality and harm of virtual currencies and Real World Asset Tokenization-related businesses and their manifestations, fully alert to potential risks and hidden dangers, and enhance public awareness and identification capabilities for risk prevention.
(18) Engaging in illegal financial activities related to virtual currencies and Real World Asset Tokenization in violation of this notice, as well as providing services for virtual currencies and Real World Asset Tokenization-related businesses, shall be punished in accordance with relevant regulations. If it constitutes a crime, criminal liability shall be pursued according to the law. For domestic entities and individuals who knowingly or should have known that overseas entities illegally provided virtual currency or Real World Asset Tokenization-related services to domestic entities and still assisted them, relevant responsibilities shall be pursued according to the law. If it constitutes a crime, criminal liability shall be pursued according to the law.
(19) If any unit or individual invests in virtual currencies, Real World Asset Tokens, and related financial products against public order and good customs, the relevant civil legal actions shall be invalid, and any resulting losses shall be borne by them. If there are suspicions of disrupting financial order and jeopardizing financial security, the relevant departments shall deal with them according to the law.
This notice shall enter into force upon the date of its issuance. The People's Bank of China and ten other departments' "Notice on Further Preventing and Dealing with the Risks of Virtual Currency Trading Speculation" (Yinfa [2021] No. 237) is hereby repealed.
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