On February 6th, eight Chinese regulatory bodies, including the People's Bank of China, 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 National Financial Regulatory Administration, the China Securities Regulatory Commission, and the State Administration of Foreign Exchange, jointly issued a "Notice on Further Preventing and Disposing of Risks Related to Virtual Currencies and Similar Assets" (hereinafter referred to as the "Notice").
The Notice maintains the authorities' long-standing prohibitive stance towards virtual currency-related activities. It explicitly clarifies the nature of businesses involving stablecoins pegged to fiat currencies and the tokenization of real-world assets (RWA).
A responsible official from the relevant departments stated that China has consistently maintained a prohibitive policy stance on virtual currency-related business activities. Currently, virtual currencies fail to meet requirements for customer identification and anti-money laundering, posing risks of being used for illicit activities such as money laundering, fundraising fraud, and illegal cross-border capital transfers.
Key points of the Notice are as follows:
1. Virtual currency-related business activities are defined as illegal financial activities. Overseas entities and individuals are prohibited from providing virtual currency-related services to domestic entities in any form. Without approval from relevant authorities, domestic entities and their controlled overseas entities are forbidden from issuing virtual currencies overseas.
2. For the first time, the Notice explicitly states that no entity or individual, domestic or overseas, may issue stablecoins pegged to the Chinese Renminbi without lawful approval from the relevant departments.
3. Conducting RWA tokenization activities within China, or providing related intermediary or information technology services, constitutes suspected illegal financial activities. These include the illegal issuance of token vouchers, unauthorized public securities offerings, illegal operation of securities and futures businesses, and illegal fundraising. Such activities are to be prohibited, except for those conducted with approval from the competent business authorities and relying on specific financial infrastructure.
4. Internet companies are barred from providing services such as online business premises, commercial displays, marketing, and paid traffic referrals for virtual currency and RWA tokenization-related business activities.
5. The registered names and business scopes of enterprises and individual businesses must not contain terms like "virtual currency," "virtual asset," "cryptocurrency," "crypto asset," "stablecoin," "real-world asset tokenization," or "RWA."
6. The crackdown on virtual currency "mining" activities will continue. This involves comprehensively reviewing, investigating, and shutting down existing virtual currency mining projects, strictly prohibiting new mining projects, and banning mining machine manufacturers from providing sales and other related services within China.
7. Domestic entities and individuals who knowingly assist overseas entities in illegally providing virtual currency or RWA tokenization services to China will be held legally accountable, with criminal liability pursued where applicable.
8. Investments in virtual currencies, RWA tokenization, and related financial products by any entity or individual, if contrary to public order and good customs, will render the related civil legal acts invalid, with losses borne by the investors themselves. Activities suspected of disrupting financial order or endangering financial security will be investigated and dealt with according to law.
The Notice represents an update and enhancement of a previous document issued in 2021. Beyond clarifying the nature of virtual currencies and RWA tokenization, it establishes robust working mechanisms, specifies requirements for risk monitoring and disposal, and imposes stringent regulations on domestic entities and their overseas affiliates conducting such businesses.
Compared to the 2021 document, the new Notice strengthens policy in four key areas:
First, it further refines regulatory requirements for virtual currencies. It reiterates the prohibitive stance, clarifies that virtual currencies lack legal tender status, and defines related activities as illegal finance. It also emphasizes that stablecoins pegged to fiat currencies effectively assume some functions of legal tender, impacting monetary sovereignty, and thus prohibits their issuance pegged to the Renminbi without approval. Furthermore, to mitigate risks, it explicitly forbids domestic entities and their controlled overseas affiliates from issuing virtual currencies abroad without authorization, addressing the cross-border risk transmission facilitated by blockchain technology.
Second, it establishes a comprehensive regulatory framework and working mechanism for RWA tokenization businesses. It defines the concept, states that conducting such business or providing related services in China constitutes suspected illegal financial activity (with specific exceptions), and strengthens oversight of domestic entities engaging in RWA tokenization overseas. This includes strict supervision by relevant authorities over overseas debt-based tokenization or asset-backed tokenizations with equity-like features.
Third, it intensifies the crackdown on virtual currency "mining." It reaffirms the prohibition, mandates strict control led by the National Development and Reform Commission, requires provincial governments to oversee the shutdown of existing projects and ban new ones, and prohibits mining machine manufacturers from providing sales services domestically.
Fourth, it calls for the continued crackdown on related illegal and criminal activities. This involves enhanced risk monitoring, inter-departmental data sharing, and coordinated efforts to combat crimes like fraud, money laundering, illegal operations, pyramid schemes, and illegal fundraising linked to virtual currencies and RWA tokenization. It also emphasizes legal liability for those assisting overseas entities in illegally providing these services to China.
China's prohibitive policy towards virtual currency-related businesses has been consistent. The central bank previously issued notices in 2013 and 2017 to curb speculation around assets like Bitcoin and initial coin offerings. In 2021, a joint notice from ten departments explicitly banned such activities. Following a resurgence of speculation in 2025, financial regulators and industry associations reiterated that these activities are illegal.
Despite years of development, virtual currencies remain unfamiliar to most investors, creating an information gap exploited by bad actors who use technical jargon to disguise financial scams. Internationally, while stablecoins have emerged, financial authorities like the Bank for International Settlements maintain a cautious stance, citing concerns about their reliability.
The Governor of the People's Bank of China previously stated that the bank would continue working with law enforcement to crack down on domestic virtual currency operations and speculation, while monitoring the development of overseas stablecoins.
Amid factors like weakened digital asset liquidity, fluctuating gold prices, and volatility in US tech stocks, Bitcoin prices have declined since the start of the year, falling below $70,000 in February, nearly halving from their peak in October 2025.
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