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Believing in the Capital Markets - The Essence and Core Value of Cryptocurrency
Foreword
The truly intriguing core questions of cryptocurrency, none of which have truly been answered to this day.
"Digital Gold" is not Bitcoin's answer. It represents a religious form of a religion that is currently undergoing regulatory co-option and facing a dual strict examination of stablecoin (the US Dollar).
The idea that "Shitcoins have zero value" is not the answer either. Shitcoin has long been a term that has been practically deprecated:
Meme coins are by no means empty. They are the capitalization of human faith, with the ability to shape cultural symbols, define a new generation of aesthetics, and even reshape the public mindset;
Although Attention Coins have experienced extreme volatility, speculation, and exploitation, they are fundamentally attention search engines for which people are wagering their hard-earned money;
The hype around the previous "Autonomous Worlds" has now clearly pointed in one direction - only AI can truly overcome human nature to build a truly autonomous digital world. The rise of AI will inevitably form a dual drive with cryptocurrency. If, on this path, the circulating currency is still fiat rather than cryptocurrency, then we may as well just call it quits;
As for the project's revenue, profit, equity, and the tug-of-war between stocks and tokens, after so many years of treating the cryptocurrency market as a stock market, it is time to put an end to that;
For so many years, the vast majority of us are still trapped in the narrow framework of "value" as dictated by VCs. If we cannot establish a set of value judgment criteria independent of the traditional stock market and VC valuation system, then we have not truly disrupted the capital market - at least not yet. This is an unmitigated failure at this point.
But failure is never the end; it is a process. Cultivation is eternal failure, and eternal failure comes from eternal struggle. This is also the greatest unrealized potential of cryptocurrency to date - its vitality always lies in challenges, disruptions, and reconstructions.
The true crypto movement should be about preaching, tokenization of all things, and one war after another on a global scale between cultures and values. These are things that VCs and pure speculators will never like because they never believe.
The following article was published at the end of last December, but amidst the Bitcoin crash, continuous industry exits, and loss of confidence, we hope this article can bring confidence to everyone.
Bitcoin is a Modern Religion
Christianity has Jesus, Buddhism has Siddhartha Gautama, Islam has Muhammad, and Bitcoin has Satoshi Nakamoto.
Christianity has the "Bible," Buddhism has the "Buddhist Scriptures," Islam has the "Quran," and Bitcoin has "Bitcoin: A Peer-to-Peer Electronic Cash System."
If we were to delve into more detailed comparisons, we would find that Bitcoin, beyond the aforementioned levels, shares many similarities with traditional religions. For example, Bitcoin also has its own doctrine (the modern financial order will eventually collapse, and Bitcoin will become the Noah's Ark at the end of the modern financial order), its own religious rituals (mining and HODLing), has also faced schisms in its development, and has transformed into a tool used by governments for certain purposes once reaching a certain scale, and so on.
However, if we were to label Bitcoin as a form of "modern religion," we must discuss its differences from traditional religions.
Firstly, "decentralization," a term that has evolved in the current crypto industry and has even taken on a hint of irony, yet undoubtedly represents the fundamental characteristic of the modern religion that Bitcoin embodies. What I emphasize here is not the degree of decentralization at which a blockchain network operates but whether "consensus formation is a decentralized process."
Bitcoin's "genesis god" Satoshi Nakamoto chose "self-exile," relinquishing his authority to create a brand-new world. Bitcoin lacks a god symbolizing central authority, nor does it have an actual central individual or entity with divine authority. It grew in an opposite manner to traditional religions—organically from the bottom up. The Bitcoin whitepaper, along with the line in the genesis block stating "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks," has never been altered. You are free to interpret them in any way you wish.
Satoshi Nakamoto is the most human-like "genesis god" yet the least human-like because he demonstrates non-human ethical standards or, one could say, ideal pursuits. Satoshi Nakamoto possessed not only billions of dollars worth of Bitcoin but also the ability to destroy this religion in an instant, akin to having a button that could obliterate the world, yet he disappeared just like that. Upon deeper contemplation, after all these years of Bitcoin's development, Bitcoin believers still wholeheartedly believe that Satoshi Nakamoto forever guards the world he created. Even today, as governments worldwide have begun to believe, you would realize how incredible it all is.
Secondly, the "Internet," which sets Bitcoin apart from traditional religions that rely on face-to-face preaching, war conquest, or migration to attract followers. The Internet not only transformed Bitcoin's propagation from the linear and geographical aspects seen in traditional religions but also endowed Bitcoin with modern infectious elements like meme culture to appeal to a new generation of youth.
And of course, there are "Devotion and Reward," as well as "Forking and Scaling." These two points are very important as they determine that modern religion is essentially a "Faith Capital Market."
Faith Capital Market
If you are a Bitcoin believer, you do not need to fast or practice asceticism; you simply need to run a Bitcoin full node or hold Bitcoin.
When your faith in Bitcoin is challenged, whether it's the block size debate or the emergence of smart contract public chains like Ethereum or Solana, you do not need to engage in holy wars; you still only need to run a Bitcoin full node or hold Bitcoin.
Both running a Bitcoin full node and holding Bitcoin can be seen as a ritual of this Bitcoin religion. This ritual does not promise you the hope of a better life or give you yearning for a blissful afterlife; instead, it tangibly provides believers with material and spiritual dual rewards through price performance.
Likewise, whether it's the block size debate or the emergence of new public chains like Ethereum or Solana, various debates ultimately result in the continuous rise of the cryptocurrency market capitalization. In cryptocurrency, conflicts of faith no longer lead to physical annihilation or spiritual conquest but instead present a situation entirely opposite to traditional religions—where traditional religions conflict to explain the world, eventually dividing the world. Cryptocurrency conflicts, however, spark the creation of the world, spreading infinitely like the universe expanding after the Big Bang, growing larger and more vibrant.
The universe is vast, accommodating countless Earths. The capital market is also vast, accommodating countless tokenized faiths.
Bitcoin is certainly a specific modern religion. However, from the perspective that it pioneered the "Faith Capital Market," its significance far exceeds that of a specific modern religion; I call it the "Religion of No Religion." As Bitcoin has developed to this day, it has undergone secularization similar to traditional religions, manifested in religious rituals shifting from running a Bitcoin full node to HODLing, and then to nearly no cryptocurrency player emphasizing its specific meaning but quietly occupying the top of the cryptocurrency market pyramid like a totem. Just as Christmas is no longer solely a Christian religious holiday in today's world, where we enjoy Christmas trees, gifts, and the festive atmosphere, changing our social media profile pictures to wear Santa hats during Christmas, although we may not be Christians.
You could say that Bitcoin is synonymous with cryptocurrency because if Bitcoin were to collapse, the cryptocurrency market would cease to exist. The foundation of all cryptocurrency values is the value of Bitcoin. However, I am not inclined to define Bitcoin in such a way—what is the core value of Bitcoin? Digital gold? Tokenized energy? Fiat slayer? In my view, the core value of Bitcoin is that it has established a modern form of religion, namely, the Faith Capital Market.
Secularization
Whether in traditional religion or Bitcoin, secularization is a double-edged sword.
Take Christmas, for example. The global commercial value brought about by Christmas (such as holiday retail, gifts, tourism, decorations, and related spending) has significantly exceeded the commercial value of traditional Christian institutions (such as congregational donations, church ticket sales, merchandise, and related income). According to estimates from Statista and the National Retail Federation (NRF), the US holiday retail sales total is around $973 billion for 2024, projected to surpass $1 trillion for the first time in 2025. These are US market figures alone, with the US accounting for around 40-50% of global Christmas spending.
In contrast, the traditional "commercial value" of Christianity, such as congregational donations (tithes, offerings), church ticket sales (e.g., church tourist sites), merchandise sales (e.g., books, souvenirs), and related income, amounts to approximately $1.304 trillion, according to the "Status of Global Christianity 2024" report from Gordon-Conwell Theological Seminary.
If we exclude contributions from non-Christians related to Christian tourist sites and souvenirs, this $1.304 trillion would need to be further discounted.
Secularization has transformed Christmas from a strictly religious holiday into a global cultural phenomenon, undoubtedly expanding the influence of Christianity to some extent but also diluting its religious core.
The same is true for Bitcoin and the entire faith-based capital market it has created. Just as many people around the world see Christmas as a joyful day, an increasing number of cryptocurrency market participants are entering solely for speculative purposes.
This is not right or wrong but an unstoppable inevitability. The question we are raising here is, while celebrating Christmas has not shaken the faith of traditional Christians, has the massive speculative wave shaken the faith of traditional Bitcoin believers?
Both being examples of secularization, the joyful atmosphere of Christmas does not lead Christians to doubt their faith, while the speculative atmosphere of the cryptocurrency market has created feelings of emptiness and disillusionment among crypto believers. The recent viral post on Twitter titled "I've wasted 8 years of my life in the cryptocurrency industry" is one of the best examples of this.
Where does the problem lie?
Myth
I dare not easily conclude on this issue. From the intuitive perspective of a crypto player, I would very cautiously say that it may be possible, but more likely, Bitcoin has developed too rapidly, and the fundamental support for Bitcoin faith itself is much smaller compared to traditional religions.
More importantly, the cryptocurrency industry has gone too far in the "technology myth." Throughout the industry’s history, both practitioners and speculators have repeatedly sought an answer to one question—"What else can blockchain technology be used for?" Practitioners use this to determine their entrepreneurial direction, while speculators use it to determine their speculative targets. When everyone is pursuing a faster, more efficient, and more practically applicable blockchain, undoubtedly, it is self-harm.
If the cryptocurrency industry is merely the second Nasdaq, it is just wasting money doing redundant work. Moreover, wasting money is just a trivial matter; the substantial damage lies in the fading recognition of the "faith in the capital market" and the consumption of faith itself.
Without Christianity, there would be no popular cultural Christmas. Without a capital market forged by faith, there would be no paradise for entrepreneurs and speculators. If we overlook this obvious cause-and-effect relationship, we will naturally continue to ask ourselves, "What new narrative do we need to create to attract more people to the cryptocurrency market?"
Whether it is traditional religion or cryptocurrency, inevitably, they must consider this question—"In different eras, in what form should we attract young people with different cultural preferences?" Bitcoin has provided a new answer, astonishing traditional religions in less than 20 years. Now, it is the turn of Bitcoin and the entire cryptocurrency industry to face this challenge.
Savior
Meme coins are the savior of the cryptocurrency industry.
First, the foundation of faith in the capital market is Bitcoin, but that does not mean we need to re-enthusiastically promote Bitcoin maximalism. The most orthodox and fervent presence in religion is often niche. Whether it is the cypherpunk spirit or the doomsday prophecy that traditional finance will eventually collapse, the novelty they bring to the new generation of young people is gradually diminishing, with a high threshold of understanding.
In other words, to revive Bitcoin as a specific religion is actually underestimating Bitcoin because what we actually want to revive is a "religion of no religion," a cognition that everyone's beliefs can converge in the modern age through the internet in the cryptocurrency market, enabling not only the harvest of material wealth but also the eruption of boundless power.
The core value of Bitcoin is "you and I both believe it has value." This seemingly trivial statement is actually a great decentralization of the right to explain value. You and I can arbitrarily take a piece of paper, write "value equal to one gram of gold," but we cannot convince anyone to accept its value. Without any value anchor and central authority endorsement, starting from scratch, crossing language, culture, geography, and other barriers, and even ultimately gaining recognition from institutions and governments, this greatness is far underestimated by the public.
Throughout history, individual consciousness has always been extremely marginalized and can be easily trampled upon, to the point where we have all underestimated the value of ourselves as individual and living beings, as well as the value of each individual thought. In fact, the world's most abundant resource has been consumed in war—the war to invade our consciousness. Political elections, advertising campaigns, and even some of the most basic common knowledge education that we consider fundamental, all consume vast amounts of money just to ultimately make us believe whether something is good or bad.
The internet is great; it enables our ideas to transcend everything, allowing continuous communication and collision of thoughts. Cryptocurrency is great; it enables us to see very concretely what we can achieve when our mutual understanding of each other's ideas reaches a vast scale and grows exponentially.
The greatness of cryptocurrency has not only been underestimated but even turned upside down. While home construction technology is indeed great, the core value of a home is to provide a dwelling for people. While "a peer-to-peer electronic cash system" is surely a brilliant concept, its core value is that everyone agrees that Bitcoin is indeed valuable electronic cash that can be used as currency. Over the years, in addition to Bitcoin, we have created countless so-called faster, more efficient, and more effective blockchains, fantasizing that this would mean more living people entering this market.
It's like thinking that, apart from religion, a phenomenon such as Christmas can be massively and rapidly replicated. We think that having a sword in our hands can make us the swordsman who rules the world, but in reality, we have no sword in our hands and even less in our hearts.
Secondly, meme coins have never truly gone through a complete and mature bull market cycle. To this day, many still believe that the value of meme coins lies in the insane hype of having no value at all. The popularity of pump.fun in the past year and Trump's coin issuance have further polluted the true definition of "meme coins" with "attention tokens."
What is a real meme coin? In fact, I don't even like the term "meme coin." The reason we have such a term is that early $DOGE and $SHIB succeeded greatly in what people believed to be a useless situation. We always tend to look for reasons after success but overlook the value of belief. So, well, their success is because that smiling dog's picture has a huge influence worldwide, so let's call it a "meme coin." Thus, let's continue the transportation of classic internet meme cultural symbols—Pepe, Wojak, Joe...
Here, I have to pay tribute to Murad. He was the first person to systematically explain what a "meme coin" really is, propose a quantifiable quality evaluation standard, and speak on a large enough stage. His "meme coin supercycle" theory has gained enough influence in the crypto world.
He grasped a very key point—that a meme is just syntactic sugar for a faith asset; a true faith asset must be like Bitcoin, able to clearly let people know its doctrine, know what we are actually facing, what needs to change, and how we are going to impact or even change this world.
So, $SPX is good, good because it's clear, clearly telling people that we are going to ruthlessly mock traditional finance by transcending the actual value of the S&P 500. So, $NEET is good, good because it's clear, clearly telling people that the nine-to-five rat race is just a scam, and we are going to liberate more people from the bondage of work by awakening them.
And just like Bitcoin believers engage in ascetic practices during the price's ups and downs, creating a true faith asset is by no means easy. In this process, new religions outside of Bitcoin not only need to introspectively find a clear positioning and meaning, unite and solidify the idea of a massive community but also continuously expand their influence outward. This is bound to be a long process, and not every tiny step forward will be reflected in the price.
Meme coins are the savior of the cryptocurrency industry; this is said because when everyone realizes that "meme coins" are actually just a misnomer that doesn't touch the essence, and "faith assets" once again shine brightly in the cryptocurrency market, everyone will marvel, "Meme coins are back!" In fact, "faith assets" are the essence of this market. I won't say it is indispensable because it naturally exists.
Conclusion
What the world cares about every year, every month, every day, and even every hour is changing. We cannot expect cryptocurrency to always be one of the most watched things in the world. If we lose faith, then this industry should die.
Greatness cannot be planned; we cannot predict what will make cryptocurrency a top global topic again. This is an ascetic practice. Bitcoin is a sociological blueprint, a cyber religion, a form of religion. If we forget this, the entire cryptocurrency industry is nothing more than a "business" based on Bitcoin consensus. And what businessmen want has never been the continual reinforcement of consensus but forever increasing revenue.
I cannot change anything, nor do I intend to change anything, but I will uphold my faith, faith in the capital markets.
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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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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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