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Stablecoin Market Cap Surges Past $235 Billion, While Meme Coins Stay Flat – Where Is the Money Hiding?
Original Article Title: "A Comprehensive Analysis of the Fund Flow Behind the $100 Billion Growth of Stablecoins, Shitcoins Stayed Flat, Where Did the Money Go?"
Original Article Author: Frank, PANews
Since 2024, the global stablecoin market has grown by 80.7% to surpass $235 billion, with USDT and USDC leading the market with a contribution rate of 86% growth. However, it is puzzling that the incremental billions of dollars deposited on the Ethereum and Tron blockchains did not trigger a simultaneous surge in the shitcoin market as in previous cycles. Data shows that for every additional $1 of stablecoin, only $1.5 of shitcoin market cap growth was leveraged in this cycle, an 82% decrease from the previous bull market.
This article will conduct a comprehensive data analysis of stablecoins to interpret the ultimate question brought by stablecoin growth in the crypto space: where did the money go? As exchange balances surge and DeFi protocol TVL rises, the penetration of OTC trading by traditional financial institutions, cross-border payment scenarios, and the currency substitution demand in emerging markets are quietly reshaping the fund flow map of the crypto world.
Stablecoin Market Cap Increases by $100 Billion, Ethereum and Tron Still Contribute 80% of Growth
According to defillama's data, from 2024 to the present, the issuance of stablecoins has increased from $130 billion to $235 billion, representing an overall growth of 80.7%. The primary growth still comes from the two major stablecoins, USDT and USDC.
On January 1, 2024, the supply of USDT was $91 billion. By March 31, 2025, the supply had increased to $146 billion, with an increase of approximately $53.6 billion, contributing 51% to the growth rate. Over the same period, USDC's supply increased from $23.8 billion to $60.6 billion, accounting for a growth rate of about 35%. These two stablecoins not only hold an 87% market share but also contribute 86% to the growth.
A closer look at the on-chain data reveals that Ethereum and Tron remain the two blockchains with the largest supply of stablecoins. Ethereum accounts for 53.62% of the stablecoin supply, while Tron's share is approximately 28.37%, totaling 81.99%.
In particular, Ethereum's stablecoin supply increased by approximately $58 billion from January 1, 2024, to April 3, 2025, with a growth rate of 86%, closely mirroring the issuance growth rates of USDT and USDC. Tron's growth rate is about 34%, lagging behind the overall stablecoin growth rate.
The third-ranked public chain is Solana, with a simultaneous increase of 12.5 billion US dollars in circulation, achieving a growth rate of 584.34%. The fourth is Base, which increased by 4 billion US dollars in circulation, with a growth rate of 2316.46%.
Among the top ten, Hyperliquid, TON, and Berachain all started issuing stablecoins only in the past year. These three have added approximately 3.8 billion US dollars in stablecoin issuance, contributing 3.6% to the stablecoin growth share. Overall, Ethereum and Tron still dominate the stablecoin market.
Every Additional $1 of Funding Only Boosts the Market Cap of Shitcoins by $1.5
Although stablecoins have experienced rapid on-chain growth, the simultaneous increase in the market cap of shitcoins has not been ideal,
For comparison, in March 2020, the total market cap of shitcoins was about 39.8 billion US dollars (excluding BTC, ETH), and by May 2021, the shitcoin market cap had risen to 813.5 billion US dollars. This represents an increase of approximately 19.43 times. Over the same period, stablecoin data increased from 6.14 billion to 99.2 billion US dollars, roughly a 15-fold increase, which is largely synchronous. The increases are roughly synchronized.
In this current bull market phase, the overall market cap of stablecoins has increased by 80%, but the overall market cap of shitcoins during the same period has only increased by 38.3%, an increase of approximately 159.9 billion US dollars.
Recapping the period from 2020 to 2021, for every additional $1 of stablecoin issuance, the total market cap of shitcoins increased by $8.3. However, by the period of 2024 to 2025, for each additional $1 of stablecoin issuance, the market cap of shitcoins only increased by $1.5. This significant reduction in ratio indicates that the newly issued stablecoins seem to not have been used to purchase shitcoins.
Where did the money go? This is a key question.
Public Chain Landscape Reshuffle: Ethereum and Tron Hold Their Ground, Solana and Base Drive Growth
Intuitively, during this cycle, the MEME frenzy on Solana has consistently led this round of the bull market. However, during the hype surrounding MEME, the basic pairing used was with SOL, and stablecoins did not have much participation space. Furthermore, based on the earlier analysis, stablecoin growth still mainly remains on Ethereum.
Therefore, to discover where the growth of stablecoins has gone, one would likely still need to analyze the trends of Ethereum or major stablecoins such as USDT and USDC.
Before diving into the analysis, it might be helpful to outline a few possible directions, which are also common speculations in the market regarding the future of stablecoins. For example, stablecoins being used more in payment scenarios, staking rewards, value storage, etc.
Let's first look at the stablecoin transaction situation on Ethereum. From the chart below, we can observe that the stablecoin transaction volume fluctuates in a regular pattern resembling a heartbeat. Behind this fluctuation, there may be a hidden pattern of stablecoin usage.
When we shorten the timeframe, we can significantly see that this fluctuation pattern is a 5+2 pattern, meaning 2 days of low activity followed by 5 days of peak activity. Upon observation, we can see that the trough period occurs over the weekends, and the peak period is generally from Monday to Wednesday, gradually decreasing from Thursday to Friday. This clear pattern of volatility seems to at least indicate that the transaction initiators of these stablecoins primarily come from institutions or enterprises, as if the dominant scenario were consumer payments, this kind of volatility would not likely be present.
Additionally, looking at the daily transaction frequency, the highest peak of daily transfers of USDT on Ethereum does not exceed 300,000 times, and usually, the transfer frequency and average amount on weekends are far lower than on weekdays. This further confirms the above inference.
USDT Flowing into Trading Platforms, USDC Deposited in DeFi Protocols
Looking at the distribution of holdings, in the past year, the balance of USDT on trading platforms has seen a significant increase. On January 1, 2024, the platform balance was 15.2 billion USDT, and by April 2, 2025, this number had grown to 40.9 billion USDT, an increase of 25.7 billion USD, representing a growth rate of 169%. This increase is much higher than the overall stablecoin issuance increase of 80.7%, and accounts for 48% of the USDT issuance increase during the same period.
In other words, in a little over a year, approximately half of the new issuance of USDT has flowed into trading platforms.
However, the situation with USDC during the same period is quite different. On January 1, 2024, the platform holdings of USDC were approximately 2.06 billion USDC, and by April 2, 2025, this number had increased to 4.98 billion USDC. Over the same period, the additional issuance of USDC was 36.8 billion USDC, of which only 7.9% flowed into trading platforms. The overall platform balance ratio is also only 8.5%, significantly lagging behind USDT's 28.4%.
The majority of the additional USDT issuance has flowed into exchanges, while the increased trading volume of USDC has not entered exchanges.
So where has the additional flow of USDC gone? This may partly explain where the funds in the market are flowing.
Looking at it from the perspective of holding addresses, the top USDC holding addresses mainly come from DeFi protocols. Taking Ethereum as an example, the largest USDC holding address is that of Sky (MakerDAO), with a holding of 4.8 billion tokens, accounting for approximately 11.9%. In July 2024, the holding quantity at this address was only 20 million tokens, increasing 229 times in less than a year. Sky's USDC is mainly used as collateral for its stablecoins DAI and USDS. The growth of USDC at this address still represents the growth of DeFi protocol TVL and the demand for stablecoins.
AAVE is the fourth largest holding address of USDC on Ethereum. On January 1, 2024, AAVE's USDC holding was about 45 million tokens, and by March 12, 2025, the highest point, the USDC holding at this address had increased to 1.32 billion tokens, a growth of approximately $1.275 billion, accounting for 7.5% of the new issuance of USDC on Ethereum.
From this perspective, the increase in USDC on Ethereum is mainly due to the growth of staking products. At the beginning of 2024, the total TVL of Ethereum was about $29.7 billion, although it has recently experienced a decline, there is still a stock of $49 billion (the TVL reached $76 billion at its peak). Calculating based on $49 billion, the TVL growth on Ethereum can also reach 64.9%, a growth rate significantly higher than that of altcoins last year and close to the overall stablecoin growth rate.
However, in terms of scale, although the TVL on Ethereum has increased by $19.3 billion, there is still a significant gap compared to the $58 billion growth of Ethereum stablecoins. Apart from the portion of new issuance contributed by exchanges, staking protocols have not fully absorbed this increase in stablecoins.
A New Scenario Emerges: Paradigm Shift from Cross-Border Payments to Institutional Trading
In addition to the growth of DeFi driving the demand for stablecoins, use cases such as consumer payments, cross-border remittances, and over-the-counter institutional trading may also be new sources of demand for stablecoin growth.
According to multiple official Circle sources, the use case of stablecoins is gradually emerging in scenarios such as cross-border remittances and consumer payments. A report by Rise shows that approximately 30% of global remittances are settled using stablecoins, with this proportion being particularly significant in Latin America and sub-Saharan Africa. Retail and professional-grade stablecoin transfers in Latin America and sub-Saharan Africa saw a year-on-year growth of over 40% from July 2023 to June 2024.
Another report by Circle reveals that by 2024, the net amount of USDC minted by Zodia Markets under Standard Chartered Bank had reached $4 billion. (Zodia Markets is an institutional digital asset brokerage firm that offers services such as OTC trading and on-chain FX to global clients).
Furthermore, customers of the Latin American retail payment company Lemon hold over $137 million USDC, with the platform's users predominantly using stablecoins for retail payments.
In addition to the increase in demand due to scenario variations, the different ecosystem structures of various chains have also led to varying stablecoin demands. For example, the MEME craze on the Solana blockchain has driven DEX trading demand. According to PANews' incomplete statistics, the TVL volume of the top 100 USDC trading pairs on the Solana blockchain is approximately $2.2 billion. Following the rule that half of this volume is in USDC, the corresponding locked-in capital is about 1.1 billion USDC, representing 8.8% of the total USDC issued on the Solana blockchain.
The Cryptocurrency Market Shifts from a "Speculative Bubble" to a "Financial Product"
After conducting a breakdown analysis of stablecoins, PANews finds it challenging to pinpoint a single factor driving stablecoin growth. Therefore, it is difficult to answer the question of where the money in the market has gone. Looking back, we may arrive at a series of complex conclusions.
1. While the market cap of stablecoins continues to grow, it seems that these funds have not massively flowed into the altcoin market, igniting the start of an altcoin season.
2. From the Ethereum market perspective, a significant portion of the growth of the primary stablecoin USDT has still flowed into trading platforms, but it appears more likely to have been used to purchase BTC (given the altcoin and Ethereum markets and the platforms' financial products. The remaining growth in demand may have been absorbed by DeFi protocols. Overall, the funds flowing into Ethereum seem to prioritize stable returns from staking and borrowing protocols. The attractiveness of the cryptocurrency market to traditional funds may no longer be wild price swings but rather a new type of financial product.
3. The emergence of new scenarios has led to traditional financial institutions such as Standard Chartered Bank entering the crypto market, making them one of the new drivers of stablecoin demand. Additionally, in underdeveloped regions where infrastructure is lacking and the local currency is unstable, the adoption of stablecoins is becoming increasingly common. However, there is still no comprehensive statistical data on this part, and we do not know the specific share.
4. Stablecoins have different narrative needs on different blockchains. For example, Solana's growth demand may come from the trading frenzy sparked by memes. The growth momentum of new public chains like Hyperliquid, Berachain, and TON has also brought about a certain level of capital demand.
Overall, the undercurrents of this capital migration reveal that the crypto market is undergoing a paradigm shift. Stablecoins have surpassed the boundaries of being mere transactional mediums and have become a value conduit connecting the traditional financial world with the crypto space. On the one hand, meme coins have failed to receive a massive transfusion of funds due to the growth of stablecoins. On the other hand, the financial management needs of institutional funds, the essential need for payments in emerging markets, and the maturity of on-chain financial infrastructure are propelling stablecoins onto a broader stage of value transmission. This may herald that the cryptocurrency market is quietly transitioning from being "speculation-driven" to a historic inflection point of "value accumulation."
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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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