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Believing in the Capital Market - The Essence and Core Value of Cryptocurrency
One year ago, I participated in a debate on Twitter Space, "Has Bitcoin's development to date relied on belief or capital manipulation?" Deep down, I felt that this debate should never have taken place, and even after the debate, I found myself plunged into deep despondency.
I have always believed that the core value of the cryptocurrency industry is consensus and culture, or rather, belief. When I quit my job in the traditional industry four years ago and wholeheartedly immersed myself in this industry, that was the mindset I held. Alongside the successes and failures of transactions, my emotions have fluctuated countless times, but my belief has never wavered.
For cryptocurrency players, 2025 has been a more disappointing year. As this year is coming to an end, we still have not been able to address the biggest issue facing the cryptocurrency market today—narrative failure and loss of faith.
As an ordinary cryptocurrency industry practitioner, although the work I do is very ordinary, over these four years, I have seen some things, pondered some things, and I have always vaguely felt that one day, I would systematically put these thoughts into writing. Now is the time.
Bitcoin Is a Modern Religion
Christianity has Jesus, Buddhism has Siddhartha Gautama, Islam has Muhammad, and Bitcoin has Satoshi Nakamoto.
Christianity has the "Bible," Buddhism has the "Tripitaka," Islam has the "Quran," and Bitcoin has "Bitcoin: A Peer-to-Peer Electronic Cash System."
If we were to make a more detailed comparison, we would find that beyond the above aspects, Bitcoin shares many similarities with traditional religions. For example, Bitcoin also has its own doctrine (the modern financial order will eventually collapse, and Bitcoin will become Noah's Ark when the modern financial order faces its doomsday), its own religious rituals (mining and HODLing), has also experienced schisms in its development, and has also become a tool for governments for certain specific purposes after reaching a certain scale, and so on.
But if we were to call Bitcoin a "modern religion," we must discuss its differences from traditional religions.
First and foremost, "decentralization," a term that has developed in the current crypto industry, has even taken on a hint of irony, but it is undoubtedly the most fundamental characteristic of the modern religion represented by Bitcoin. What I am emphasizing here is not the degree of decentralization at which a blockchain network operates, but whether the cohesion of consensus is a process of decentralization.
Bitcoin's "Genesis God" Satoshi Nakamoto chose "self-exile"; he relinquished his own authority, thus creating a brand-new world. Bitcoin does not have a god symbolizing central authority, nor does it have an actual central individual or entity holding divine power. It has grown from the bottom up in reverse to traditional religions. The Bitcoin whitepaper, along with the phrase in the genesis block "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks," has never been changed. As long as you are interested, you can interpret them in any way you want.
Satoshi Nakamoto is the most human-like "creator god," but also the least human-like, because he has demonstrated a non-human ethical standard, or rather an ideal pursuit. Satoshi Nakamoto possessed not only billions of dollars worth of Bitcoin, but also the ability to single-handedly destroy this religion, akin to having a button that could destroy the world with a push, yet he disappeared just like that. If you think more deeply, after so many years of Bitcoin development, Bitcoin believers still believe that Satoshi Nakamoto forever guards the world he created, even today, when governments around the world have begun to believe, you will realize how incredible it all is.
Next, the "Internet," which makes Bitcoin unlike traditional religions that rely on face-to-face preaching, war conquest, or migration to attract followers. The Internet not only makes the spread of Bitcoin no longer linear and geographical like traditional religions, but also gives Bitcoin a modern infectious power like meme culture to attract young people of the new generation.
Of course, there are also "Devotion and Reward" and "Fork and Expansion." These two points are very important, as they determine that modern religions are essentially a "faith capital market."
Faith Capital Market
If you are a Bitcoin believer, you do not need to fast or undergo ascetic practices; you only need to run a Bitcoin full node or hold Bitcoin.
When your belief in Bitcoin is challenged, whether in the block size debate or in smart contract public chains like Ethereum, Solana, etc., you do not need to engage in holy wars; you still only need to run a Bitcoin full node or hold Bitcoin.
Whether running a Bitcoin full node or holding Bitcoin, both can be considered a religious ritual of the Bitcoin religion. This kind of religious ritual does not promise you the hope of a good life or give you a yearning for a blissful afterlife, but rather tangibly provides believers with material and spiritual dual rewards through price performance.
Likewise, whether it is the block size debate or the emergence of new public chains like Ethereum, Solana, the various controversies ultimately result in the continuous rise of the cryptocurrency's total market capitalization. In cryptocurrency, conflicts of faith no longer lead to physical annihilation or spiritual conquest but once again present a situation completely opposite to traditional religions—where traditional religions conflict to explain the world and end up dividing the world. Cryptocurrency conflicts are like sparks creating the world, spreading infinitely like the universe after the Big Bang, growing larger and more vibrant.
The universe is vast, accommodating countless Earths. The capital market is also vast, accommodating countless tokenized faiths.
Bitcoin is certainly a specific modern religion. However, from the perspective of creating the "faith capital market," its significance far exceeds that of a specific modern religion. I call it the "religion of no faith." As Bitcoin has developed to this day, it has undergone secularization just like traditional religions, manifested specifically in religious rituals transitioning from running a Bitcoin full node, to HODL, and then to hardly any cryptocurrency players emphasizing its specific meaning, instead quietly perching atop the cryptocurrency market pyramid like a totem. Just as Christmas is no longer a Christian religious holiday in today's world, where we enjoy Christmas trees, Christmas gifts, and the atmosphere of Christmas, changing our social media account avatars to wear Santa hats during Christmas, but we may not be Christians.
You could say that Bitcoin is cryptocurrency because if Bitcoin were to collapse, the cryptocurrency market would cease to exist. The value of all cryptocurrencies, their foundation, is based on the value of Bitcoin. But I'm not so keen to define Bitcoin that way — what is the core value of Bitcoin? Digital gold? Tokenized energy? Fiat slayer? In my view, the core value of Bitcoin is that it has established a modern form of religion, namely faith in the capital market.
Secularization
Both in traditional religion and in Bitcoin, secularization is a double-edged sword.
Take Christmas, for example. The global commercial value brought about by Christmas (such as holiday retail, gifts, tourism, decorations, and related spending) has significantly surpassed the commercial value of traditional Christian institutions (such as congregational donations, church tickets, sales, and related revenue). According to estimates from Statista and the National Retail Federation (NRF), the U.S. holiday retail sales in 2024 are projected to be around $973 billion, expected to surpass $1 trillion for the first time in 2025. These are figures from the U.S. market alone, which represents about 40-50% of global Christmas spending.
In contrast, the traditional "commercial value" of Christianity includes congregational donations (tithes, offerings), church tickets (e.g., church tourist attractions), sales (e.g., books, souvenirs), and related revenue. According to the "Status of Global Christianity 2024" report by Gordon-Conwell Theological Seminary, this amounts to a cumulative total of approximately $13.04 trillion.
Even when we exclude the contributions from non-Christians visiting Christian tourism sites and purchasing Christian merchandise, this $13.04 trillion figure still needs to be discounted.
Secularization has transformed Christmas from a strictly religious holiday into a global cultural phenomenon, which has certainly expanded the influence of Christianity to some extent but has also diluted its religious core.
Bitcoin and the entire faith-based capital market it has created are no different. Just as many people around the world only see Christmas as a day of joy, an increasing number of cryptocurrency market participants are entering purely for speculative purposes.
This is not a matter of right or wrong but an unstoppable inevitability. However, the issue we are pointing out here is whether celebrating Christmas has shaken the faith of traditional Christians as the massive speculative frenzy has shaken the faith of traditional Bitcoin believers.
Both being forms of secularization, the joyful atmosphere of Christmas does not cause Christians to doubt their faith, while the speculative environment of the cryptocurrency market has led cryptocurrency believers to feel a sense of disillusionment and defeat in their faith. The recent viral post on Twitter titled "I wasted 8 years of my life in the cryptocurrency industry" is one of the best examples of this.
Where is the problem?
Misconception
I dare not easily draw a conclusion on this issue. From the intuitive perception of a crypto player, I would be very cautious to say that it may exist, but it is more likely that Bitcoin has developed too rapidly, and the fundamental belief in Bitcoin itself is much smaller compared to traditional religion.
More importantly, the cryptocurrency industry has gone too far on the "technical misconception." All along, whether industry practitioners or speculators, everyone has been repeatedly seeking an answer to a question—what else can blockchain technology be used for? Practitioners use this to determine their entrepreneurial direction, and speculators use it to determine their speculative targets. When everyone is pursuing a faster, more efficient, and more practically applicable blockchain, it is undoubtedly self-destructive.
If the cryptocurrency industry is just the second Nasdaq, then it is simply wasting money doing repetitive work. Moreover, wasting money is just a trivial matter. The serious harm lies in the fading recognition of the "faith capital market" essence and the consumption of faith itself.
Without Christianity, there would be no popular culture Christmas. Without the capital market forged by faith, there would be no paradise for entrepreneurs and speculators. If we neglect this obvious cause-and-effect relationship, we will naturally continue to ask ourselves painfully, "What new narrative do we need to create to attract more people to enter the cryptocurrency market?"
Both traditional religion and cryptocurrency inevitably have to ponder this question—In different eras, what kind of image should be presented to attract young people with different cultural preferences? Bitcoin has handed in a new answer sheet, astounding traditional religion in less than 20 years. Now, it's the turn of Bitcoin and the entire cryptocurrency industry to face this challenge.
Savior
The meme coin is the savior of the cryptocurrency industry.
Firstly, the foundation of the faith capital market is Bitcoin, but this does not mean that we need to fervently promote Bitcoin maximalism again. The most orthodox and fanatical presence in religion are often niche, whether it's the cypherpunk spirit or the apocalyptic prophecy that traditional finance will eventually collapse. The freshness that can bring to the new generation of young people is gradually declining and has a high level of understanding threshold.
In other words, to revitalize this specific religion of Bitcoin is actually belittling Bitcoin because what we actually want to revitalize is a "religionless religion," a cognition that everyone's belief can converge in the modern era through the Internet in the cryptocurrency market, not only harvest material wealth but also burst out infinite power.
The most core value of Bitcoin is "the fact that we both believe it has value." This may seem like a truism, but it is actually a great decentralization of the right to explain value. You and I can arbitrarily take a piece of paper and write "value of one gram of gold" on it, but we have no way to convince anyone to accept its value. Starting from scratch, crossing multiple barriers such as language, culture, geography, and eventually gaining recognition from institutions and governments, this greatness has been far underestimated by the public.
From ancient times to the present, individual consciousness has always been extremely marginalized and can be arbitrarily trampled upon, to the point where we have all underestimated ourselves as independent and living individuals, the value of each individual idea. In fact, the most abundant resource in this world has been consumed in wars—the wars that invade our consciousness. Political elections, advertising, and even some of the most basic common sense education that we consider essential—all consume massive amounts of money just to ultimately make us believe whether something is good or bad.
The internet is great; it allows our ideas to transcend everything, enabling continuous communication and collision around the clock. Cryptocurrency is great; it makes it very clear to us that when we know each other's ideas and reach a consensus, and when these ideas grow exponentially to a huge scale, what can we really achieve.
The greatness of cryptocurrency is not only underestimated but even reversed. While construction technology for houses is indeed great, the core value of a house is to provide shelter. While "a peer-to-peer electronic cash system" is certainly a brilliant concept, its core value is for everyone to acknowledge that Bitcoin does have value and can be used as electronic cash like traditional currency. Over the years, we have created countless so-called faster, more efficient, and more versatile blockchains outside of Bitcoin, imagining that this would mean more living people entering this market.
It is like how we think, aside from religion, a phenomenon like Christmas can be quickly and massively replicated. We think that with a sword in hand, we can become the sole swordsman dominating the world, but in reality, we have neither a sword in hand nor in our hearts.
Furthermore, meme coins have never truly undergone a complete and mature bull market cycle. To this day, many still believe that the value of meme coins lies in the crazy hype of having no value at all. The popularity of pump.fun over the past year and the issuance by Trump have once again polluted the true definition of meme coins with "attention tokens."
What is a real meme coin? In fact, I don't even like the term "meme coin." The reason we have this term is that early on, $DOGE and $SHIB succeeded when people thought they were useless. We always tend to look for reasons after success but overlook the value of faith. So, well, their success is because that smiling dog picture has a huge global impact, so let's call it a "meme coin." So, well, let's continue to carry on the internet's classic meme cultural symbols—Pepe, Wojak, Joe...
Here, I have to pay tribute to Murad, who was the first to systematically explain what a "meme coin" really is, proposed a set of quantifiable quality assessment standards, and delivered a speech on a significant stage. His "meme coin supercycle" theory has gained enough influence in the crypto space.
He insightfully pinpointed a crucial point—memes are merely the syntax of faith assets. A true faith asset must, like Bitcoin, be able to clearly let people know its doctrine, what we are really facing, what needs to change, and how to influence or even change the world.
So, $SPX is good in that it is clear, clearly telling people that we intend to mock traditional finance by surpassing the actual value of the S&P 500. So, $NEET is good in that it is clear, clearly telling people that the nine-to-five grind is nothing but a deception, and we aim to liberate more people from the bondage of work.
And just like Bitcoin believers endure ascetic practices through the price's ups and downs, creating a true faith asset is by no means easy. In this process, new religions outside of Bitcoin must not only introspectively find a clear positioning and meaning, unify, and consolidate the idea of a vast community, but also continuously expand their influence outward. This is bound to be a long process, and not every small progress will be reflected in the price.
Meme coins are the savior of the cryptocurrency industry. This is said because when everyone realizes that "meme coin" is actually just a misnomer that does not touch on the essence, and "faith assets" once again shine brightly in the cryptocurrency market, everyone will be amazed, "Meme coins are back!" In fact, "faith assets" are the essence of this market. I would not say it is indispensable because it naturally exists.
Conclusion
What the world cares about each year, each month, each day, or even each hour is changing. We cannot expect cryptocurrency to always be one of the most prominent things in the world. If we lose faith, then this industry should also perish.
Greatness cannot be planned. We cannot predict what will make cryptocurrency a top global topic again. This is an ascetic practice. Bitcoin is a sociological template, a cyber religion, a form of religion. If we forget this, the entire cryptocurrency industry is nothing more than a "business" based on Bitcoin's consensus. And what businessmen want is never the continuous reinforcement of consensus but perpetual income growth.
I cannot change anything, nor do I intend to, but I will adhere to my faith, faith in the capital markets.
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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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