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Gold Panning in the Sandbox: Finding Long-Term Investment Opportunities Across Bull and Bear Markets (Part 2)
Original Title: "Gold Panning in the Desert: Seeking Long-Term Investment Targets Across Bull and Bear Markets (2025 Edition Part 2)"
Original Authors: Alex Xu, Lawrence Lee, Mint Ventures
In the previously published "Gold Panning in the Desert: Seeking Long-Term Investment Targets Across Bull and Bear Markets (2025 Edition)" Part 1 and Part 2, we reviewed and introduced projects in the lending track such as Aave, Morpho, Kamino, MakerDao, projects in the staking track like Lido, Jito, and projects in the trading track such as Cow Protocol, Uniswap, and Jupiter. This article, as the final part of the series, will continue to introduce projects with strong fundamentals and long-term growth potential.
PS: This article represents the authors' phased thinking as of the publication date, which may change in the future. The viewpoints are highly subjective and may contain errors in facts, data, or reasoning.
All views expressed in this article are not investment advice. Industry peers and readers are welcome to provide criticisms and engage in further discussions.
4. Crypto Asset Service: Metaplex
Business Status
Business Scope
The Metaplex protocol is a digital asset creation, sales, and management system built on the Solana blockchain and supporting the Solana Virtual Machine (SVM). It provides developers, creators, and businesses with tools and standards to build decentralized applications. Metaplex supports various types of crypto assets, including NFTs, FTs (Fungible Tokens), Real-World Assets (RWA), gaming assets, DePIN assets, etc.
In terms of crypto asset services, Metaplex's offerings can be categorized into Digital Asset Standards and Asset Issuance/Sales/Management Program Library. The former provides asset issuers with token issuance standards that are highly compatible with the SVM ecosystem, with low creation and management costs. The latter consists of a range of tools and services for asset issuers to create, sell, and manage their assets.
Most of the NFT and FT assets issued on Solana are from Metaplex users.
Over the past six months, Metaplex has also expanded its business horizontally into other foundational service areas in the Solana ecosystem through its new business line, Aura Network, such as digital asset indexing and data availability services.
Metaplex's product and service matrix, Source: Developer Documentation
In the long run, Metaplex aims to become one of the most important multi-field foundational service projects in the Solana ecosystem.
In addition to Solana, Metaplex currently provides services on Sonic and Eclipse as well.
Revenue Model
Metaplex's business model is relatively simple, earning service fees by providing on-chain asset-related services, including asset minting services, as well as digital asset indexing and data availability services.
Metaplex offers a variety of services and products, not all of which incur charges. The specific service fee schedules are as follows:
MPL Asset Service Fee Schedule, Source: Developer Documentation
Aura Service Fee Schedule, Source: Developer Documentation
The Aura business line is still in its early stages, with most of Metaplex's current revenue coming from asset minting and management services (MPL).
Business Data
We will focus on two core metrics: the quantity of assets minted through its services and protocol revenue.
Before presenting and analyzing these two metrics, let's first take a look at the distribution of asset types issued by the Metaplex protocol.
Data Source: Metaplex Public Dashboard, the same below
The chart above shows the trend of the proportion of NFT and FT assets using Metaplex Metadata (providing additional metadata for digital assets, such as asset images, descriptions, etc., which is used for almost all assets).
We can see that at the beginning of 2024, the main assets issued by the Metaplex protocol were NFTs, accounting for approximately 80%. However, starting from April last year, the proportion of FT assets rapidly increased, becoming the main service asset category of Metaplex, currently accounting for over 90%.
Most of these FT assets are meme projects, with the issuers behind them being the main customer base and revenue contributors to Metaplex.
This also means that the prosperity of memes on the Solana blockchain directly affects the business trends of Metaplex.
Let's look at specific business metrics.
Asset Minting Volume (Monthly)
We can see that Metaplex's asset minting volume took off starting from September last year, reaching a historical peak in January (with over 2.3 million types of assets minted). It then gradually declined, with the data in March basically returning to the level of June last year (about 960,000 types of assets minted), closely aligned with the trend of meme transactions' popularity in the Solana ecosystem. The higher the meme popularity, the more assets are issued through Metaplex.
Protocol Revenue
Metaplex's protocol revenue follows the trend of its asset minting volume, reaching a historical peak in January, with protocol revenue reaching $4.3 million, then quickly declining. The estimated protocol revenue for March is $1.2-1.3 million, returning to the level of the first half of last year.
Protocol Incentives
Unlike most Web3 protocols that rely on business data subsidies, Metaplex does not provide subsidies to its business; its revenue is entirely organic, coming from the genuine demand of asset issuers. However, in January to early March of this year, it conducted a $1 million token incentive program in collaboration with Orca, Kamino, and Jito to incentivize the liquidity of its token MPLX, which is now planned to have concluded.
Competitive Landscape
As the earliest asset standard setter on Solana, Metaplex currently faces no direct competition in the field of asset standards and associated asset services within the Solana ecosystem.
Competitive Advantage
Metaplex's competitive advantage stems from being the architect and custodian of Solana's asset standards, serving as the foundation of Solana's digital assets and ensuring interoperability and liquidity across NFTs, FTs, Real World Assets (RWA), Decentralized Public Infrastructure Network (DePIN), in-game assets, and more within the ecosystem.
This means that issuers who have minted and maintained assets on Metaplex would face significant time, technical, and economic costs if they desire to migrate their assets to other protocols for management.
Furthermore, new developers and projects opting for an asset service platform would prioritize Metaplex's asset format with stronger ecosystem compatibility to ensure their assets align with Solana's other ecosystem infrastructures (such as wallets) and products (DeFi, trading dashboards).
Beyond asset services, Metaplex's upcoming data indexing and data availability service, Aura Network, is poised to create a second growth curve for Metaplex in the future. Given the high overlap in target audience between this new service and Metaplex's existing client base, the expansion into this new business might be more readily accepted and experienced by current collaborating clients.
Key Challenges and Risks
The dwindling popularity of Solana memes has led to a continuous decline in asset minting volumes, resulting in reduced business revenue. This trend, observed since January, has yet to show signs of reversal.
Metaplex's current revenue model relies on one-time fees based on the type of asset created. Projects with relatively stable asset types cannot provide Metaplex with sustained revenue over the long term.
Valuation Reference
Metaplex's protocol token is MPLX, with a total supply of 1 billion.
Currently, MPLX primarily serves as a governance token. In addition, Metaplex announced that starting from March 2024, 50% of the protocol's revenue would be used for token buybacks (in practice, this standard has not been strictly enforced and most buybacks fall between 10,000 to 12,000 SOL), with the repurchased tokens going into the treasury to further develop the protocol's ecosystem.
So far, the monthly buyback volume has been above 10,000 SOL.
Considering that Metaplex lacks comparable benchmark projects, we mainly observe its market cap-to-monthly protocol revenue ratio to evaluate it from a vertical perspective.
As of now, compared to its first-quarter protocol revenue, its valuation level is at a low point over the past year, which also largely reflects the market's pessimistic expectations for the asset issuance market on Solana.
5. Hyperliquid: The Troublesome Derivative + L1
Hyperliquid is one of the few practical new projects in this cycle. Mint Ventures published an article about Hyperliquid at the end of last year. Interested readers can go check it out.
Current Business Status
Hyperliquid's business can be divided into three parts: derivative exchange, spot exchange, and public chain. Currently, all three business segments have been launched, but in terms of business volume and influence, the derivative exchange is Hyperliquid's core business at present.
For the derivative exchange, trading volume and open interest are its key metrics.
Hyperliquid's derivative trading started cold-launching in June 2023, initiated incentive activities in November 2023, and saw a formal token airdrop by the end of November 2024. Since December of last year, the average daily trading volume of Hyperliquid's derivatives has been between $40-70 billion, with a peak daily trading volume of $181 billion. Open interest has also quickly increased, fluctuating between $25-45 billion since December.
Source: Hyperliquid Website
Hyperliquid's platform funds surged starting in November and have been fluctuating around $20 billion since then. However, due to a series of recent attack incidents, Hyperliquid's funds plummeted from $25 billion to $18 billion.
On the user side, the number of addresses on Hyperliquid has also rapidly increased, with the current total number of transaction addresses approaching 400,000.
In terms of spot trading, Hyperliquid previously only supported native assets on Hyperliquid L1, with HYPE itself accounting for the vast majority of the trading volume. However, in February of this year, Hyperliquid launched uBTC, a decentralized BTC spot trading solution tailored for Hyperliquid. However, the daily trading volume of BTC spot trading on Hyperliquid is roughly between $20-50 million, accounting for a relatively small proportion of the daily spot trading volume of around $200 million on Hyperliquid.
Hyperliquid Spot Trading Volume Source: DeFillama
Additionally, Hyperliquid's spot listing adopts a decentralized approach (HIP-1), where anyone can qualify to publicly auction a spot listing on Hyperliquid. The auction amount for this part can be seen as Hyperliquid's "listing fee," the trend of which is shown in the following graph;
Hyperliquid Spot Listing Qualification Historical Auction Prices Source: ASXN
It can be seen that Hyperliquid's listing fee has fluctuated significantly, reaching a peak of nearly a million dollars in December, but has since decreased to around $50,000 as the market's enthusiasm for meme coins has waned.
Hyperliquid's EVM component, HyperEVM, went live in alpha on February 18 of this year. On March 26, HyperEVM was integrated with the existing HyperCore. However, since a significant portion of EVM protocols have not yet been launched, key infrastructure such as bridges is not very mature, and the official team has not introduced any incentives, the overall activity of HyperEVM is still limited. In terms of TVL, trading volume, and transaction count, it ranks around the top 20 among all chains.
Cross-chain TVL, Trading Volume, TX Data Source: Geckoterminal
Regarding revenue distribution, they will allocate all protocol revenue, including derivatives and spot trading fees, as well as spot listing auction fees, except for the portion allocated to the HLP, all to repurchase $HYPE tokens through the AF Assistance Fund.
Hyperliquid's revenue in the last 30 days was $42.05 million, ranking just below Tether, Circle, and Tron, higher than Solana, Ethereum, and other L1 blockchains, as well as many other applications like Pump Fun and Pancakeswap. Except for Tron, the revenue of other protocols is not related to their tokens (or has no associated token).
30-day Revenue Ranking of All Protocols Source: DeFillama
Competitive Landscape
As the HyperEVM is currently in a state more akin to an "online test" status, we mainly distinguish between derivative exchanges and spot exchanges to analyze Hyperliquid's competitive position.
Decentralized Derivatives Exchange Trading Volume Share Source: Dune
Hyperliquid currently holds an absolute leading position in decentralized derivatives exchanges.
Compared to several top-tier centralized exchanges, Hyperliquid's trading volume is also rapidly increasing. The following chart shows the ratio of Hyperliquid's trading volume to that of Binance, Bybit, OKEx, and Gate contract trading:
Ratio of Hyperliquid Contract Trading Volume to Centralized Exchange Contract Trading Volume Source: Syncracy report
In the spot trading section, Hyper's average daily trading volume in the last month is around $180 million, ranking 12th among all DEXs.
Dex Spot Trading Volume Ranking Top 15 Source: DeFillama
Hyperliquid's Competitive Edge
Hyperliquid's derivative business has rapidly developed, mainly relying on the following key points:
1. Adoption of the widely validated order book model in the trading field, providing a smooth migration experience from centralized exchanges, and facilitating market maker integration;
2. A more proactive token listing strategy. Hyperliquid was the first to launch a Pre-launch token contract and also introduced contracts for pure DEX tokens. It promptly follows up on trending coins, making Hyperliquid the go-to exchange for the best liquidity for many new tokens;
3. Lower fees. Compared to the approximately 0.1% GMX comprehensive fee (including 0.06% to 0.08% trading fees, slippage fees, borrowing costs, etc.), Hyperliquid only charges a 0.0225% (Source: Mint Ventures) comprehensive fee, giving Hyperliquid a more significant fee advantage.
All of the above has allowed Hyperliquid to establish a strong presence in the decentralized derivatives exchange field. Starting from November 23, 2021, the loyalty program and generous airdrop plan have further accumulated user loyalty, making Hyperliquid currently unmatched by competitors in the decentralized derivatives exchange market.
However, the above points are not sufficient to constitute a lasting competitive advantage for Hyperliquid, as competitors can easily replicate Hyperliquid's mechanism design, token listing strategy, and fee structure.
Currently, Hyperliquid's competitive edge lies mainly in:
1. A nimble and enterprising team with a track record of continuous delivery. Hyperliquid currently has a team size of around 10-20 people. In less than 2 years, they have innovatively delivered derivative exchanges, spot exchanges, and L1 products in succession. Although some products still have flaws, the team's innovation and delivery capabilities stand out among similar products.
2. Strong Brand Effect. Despite the recent ETH Contract and JELLY Contract incidents, Hyperliquid still maintains a strong brand effect compared to other competitors. Hyperliquid remains the preferred choice for on-chain user contract transactions.
3. Economies of Scale. With a market-leading position since the second half of 24, Hyperliquid has accumulated deeper liquidity compared to its competitors. The resulting economies of scale are a significant competitive advantage for Hyperliquid.
It is worth noting that while full data transparency is not inherently considered a competitive advantage for Hyperliquid, although this feature is generally convenient for users, the business implications for Hyperliquid could be more of a disadvantage than an advantage in both the short and long term. We will elaborate on this in the subsequent JELLY Contract incident.
Main Challenges and Risks
Derivative Trading Mechanism Risk: Hyperliquid has recently experienced two consecutive events:
One was a 50x whale leverage long ETH liquidation event, resulting in a $4 million loss for HLP, primarily due to unreasonable margin rules that Hyperliquid had in place. The loophole causing this issue has since been fixed. The other was the JELLY Contract incident, where the main issue was Hyperliquid's flawed setting of position limits for low-cap coins.
At the time of JELLY's listing, its market cap was close to $200 million. Hyperliquid had set a generic $30 million position limit; however, at the time of the incident, JELLY's market cap had fallen to below $10 million, but Hyperliquid's position limit remained at $30 million, providing an opportunity for external funds to attack. This event resulted in HLP's highest loss of nearly $15 million (24% of HLP's total historical profit), with Hyperliquid ultimately choosing to settle based on the price of JELLY before the price anomaly, sparking discussions about its decentralization.
Both events have highlighted flaws in Hyperliquid's core trading rules. Although Hyperliquid took effective remedial measures afterwards, fundamentally, the feature of "complete transparency of all addresses' position status (including position size and liquidation amounts)" in a decentralized derivatives exchange, combined with the feature of "HLP fully bearing the liquidation counterparty" on the Hyperliquid platform, has theoretically left potential attackers with infinite attack vectors. Under artificially set rules, various vulnerabilities may exist, which can be exploited by malicious actors in the blockchain's dark forest.
As long as these two core mechanisms remain unchanged, Hyperliquid still faces the possibility of future attacks. This is currently the market's main concern regarding Hyperliquid.
Security Risk: Currently, Hyperliquid's funds are primarily stored in its Arbitrum network bridge. The security of this smart contract and the security of the team multisig that controls all funds are crucial. Previously, in December, there was an incident where North Korean hackers tested the Hyperliquid contract, causing Hyperliquid's funds to drop from $22 billion to $19 billion.
EVM Progress Below Expectations: There is still a significant expectation for HYPE in its current valuation regarding its EVM. The progress since the launch of HyperEVM has not been very smooth. If this continues, the valuation of HYPE's L1 portion will continue to decrease. The overall valuation of L1 should be much higher than that of derivative exchanges. If we only consider the valuation based on derivative exchanges, then the current valuation of HYPE is already not low (details below).
Valuation Reference
Hyperliquid's revenue currently mainly comes from derivatives and spot exchange trading fees, as well as spot exchange listing fees. Hyperliquid currently uniformly distributes this revenue, subsidizes the HLP earnings, and fully repurchases HYPE through the AF (Assistance Fund). Therefore, for the valuation of HYPE, we apply the P/S model and even the P/E model (the portion used to repurchase HYPE is both revenue and can be seen as the token holder's net profit).
Hyperliquid's revenue in the last 30 days is $42.05 million, with an annualized revenue of $502 million. Based on the current $4.2 billion market capitalization, the circulating PS is 8.33, and the total PS is 24.96. Calculated based on the circulating PS, within the derivative exchange category, Hyperliquid's valuation is close to GMX and ApolloX. However, compared to L1, Hyperliquid's valuation is still relatively low.
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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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