The People's Bank of China and seven other departments: Continue to regulate virtual currency "mining" activities and implement strict supervision of domestic entities engaging in related activities abroad.

All provincial, autonomous region, and municipal people’s governments, Xinjiang Production and Construction Corps:

Recently, speculative activities related to virtual currencies and real-world asset (RWA) tokenization have occurred from time to time, disrupting economic and financial order and endangering the property safety of the public. To further prevent and address risks related to virtual currencies and real-world asset tokenization, and to effectively safeguard national security and social stability, in accordance with the “People’s Bank of China Law of the People’s Republic of China,” the “Commercial Bank Law of the People’s Republic of China,” the “Securities Law of the People’s Republic of China,” the “Securities Investment Fund Law of the People’s Republic of China,” the “Futures and Derivatives Law of the People’s Republic of China,” the “Cybersecurity Law of the People’s Republic of China,” the “RMB Management Regulations of the People’s Republic of China,” the “Regulations on Preventing and Disposing of Illegal Fundraising,” the “Foreign Exchange Management Regulations of the People’s Republic of China,” the “Telecommunications Regulations of the People’s Republic of China,” and other relevant laws, and having reached 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 following notices are issued:

1. Clarify the Nature of Virtual Currencies, Real-World Asset Tokenization, and Related Business Activities

(1) Virtual currencies do not have the same legal status as legal tender. Virtual currencies such as Bitcoin, Ethereum, Tether, etc., are characterized mainly by being issued outside monetary authorities, utilizing encryption technology and distributed ledgers or similar technologies, existing in digital form, and lacking legal tender status. They should not and cannot be used as currency in market circulation.

Activities related to virtual currencies are illegal financial activities. Engaging in activities such as exchanging legal tender for virtual currencies within the country, exchanging virtual currencies, buying and selling virtual currencies with a central counterparty, providing information intermediary and pricing services for virtual currency trading, issuing tokens for fundraising, and trading virtual currency-related financial products are suspected of illegal issuance of tokens or securities, unauthorized public issuance of securities, illegal operation of securities and futures businesses, illegal fundraising, and other illegal financial activities. All such activities are strictly prohibited and must be resolutely shut down according to law. Overseas entities and individuals are not allowed to illegally provide virtual currency-related services to domestic entities in any form.

Stablecoins pegged to legal currency circulate in disguised form of legal currency functions. Without the approval of relevant authorities, no domestic or foreign entity or individual shall issue stablecoins pegged to the RMB outside the country.

(2) Real-world asset tokenization refers to activities that use encryption technology and distributed ledger or similar technologies to convert ownership rights, income rights, and other rights of assets into tokens (or similar rights) or other rights, bonds, or certificates with token-like features, and then issue and trade these tokens.

Activities involving real-world asset tokenization within the country, including providing intermediary, information technology services, etc., are suspected of illegal issuance of tokens, unauthorized securities issuance, illegal operation of securities and futures businesses, illegal fundraising, and other illegal financial activities, and should be prohibited; except for activities conducted with the approval of the competent business authorities and based on specific financial infrastructure. Overseas entities and individuals are not allowed to illegally provide real-world asset tokenization services to domestic entities in any form.

2. Improve Work Mechanisms

(3) Departmental coordination. The People’s Bank of China, together with the 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, and other departments, shall improve work mechanisms, strengthen coordination with the Cyberspace Administration of China, the Supreme People’s Court, and the Supreme People’s Procuratorate, and form a joint effort to guide various regions in preventing and handling risks related to illegal virtual currency activities.

The China Securities Regulatory Commission, together with the National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public Security, People’s Bank of China, State Administration for Market Regulation, China Banking and Insurance Regulatory Commission, and State Administration of Foreign Exchange, shall improve work mechanisms, strengthen coordination with the Cyberspace Administration of China, the Supreme People’s Court, and the Supreme People’s Procuratorate, and guide regions in preventing and handling risks related to illegal activities involving real-world asset tokenization.

(4) Strengthen territorial implementation. Provincial-level governments are responsible for coordinating the prevention and handling of risks related to virtual currencies and real-world asset tokenization within their administrative regions. Local financial regulatory departments shall take the lead, with participation from branches and dispatched agencies of the State Council’s financial regulatory departments, as well as telecommunications, public security, and market regulation departments. They shall work in coordination with cyberspace, courts, and procuratorates, establish normalized work mechanisms, and connect effectively with relevant central work mechanisms to form a pattern of central-local collaboration and joint responsibility, actively prevent and properly handle risks related to virtual currencies and real-world asset tokenization, and maintain economic and financial order and social stability.

3. Strengthen Risk Monitoring, Prevention, and Disposal

(5) Enhance 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, and Cyberspace Administration, among others, shall continuously improve monitoring technologies and systems, strengthen cross-departmental data analysis and sharing, establish and improve information sharing and cross-verification mechanisms, and promptly grasp the risk trends of activities related to virtual currencies and real-world asset tokenization. Provincial governments shall fully utilize local monitoring and early warning mechanisms, with local financial regulatory departments working with branches and dispatched agencies of the State Council’s financial departments, as well as cyberspace, public security, and other departments, to ensure effective online monitoring, offline investigation, and fund monitoring, accurately identify activities related to virtual currencies and real-world asset tokenization, share risk information in a timely manner, and improve early warning, verification, and rapid response mechanisms.

(6) Strengthen management of financial, intermediary, and technical service institutions. Financial institutions (including non-bank payment institutions) shall not provide account opening, fund transfer, clearing, or settlement services for virtual currency-related activities, shall not issue or sell virtual currency-related financial products, shall not include virtual currencies and related financial products as collateral or pledge assets, and shall not conduct insurance business related to virtual currencies or include virtual currencies within insurance coverage, and shall enhance risk monitoring. Any illegal or violations should be reported to relevant authorities promptly. Financial institutions (including non-bank payment institutions) shall not provide custody, clearing, or settlement services for unapproved real-world asset tokenization activities or related financial products. Intermediary and information technology service providers shall not provide intermediary or technical services for unapproved real-world asset tokenization activities or related financial products.

(7) Strengthen management of internet content and access. Internet companies shall not provide network venues, commercial display, marketing, paid traffic, or other services for virtual currency and real-world asset tokenization activities. Any illegal or violations clues should be reported promptly to relevant authorities, and technical support and assistance should be provided for investigations and law enforcement. Cyberspace, telecommunications, and public security departments shall, based on clues transferred by financial authorities, promptly shut down and handle websites, mobile apps (including mini-programs), and public accounts involved in virtual currency and real-world asset tokenization activities.

(8) Strengthen registration and advertising management of operating entities. Market regulation departments shall strengthen registration and management of business entities. Companies and individual businesses shall not include terms such as “virtual currency,” “virtual assets,” “cryptocurrency,” “crypto assets,” “stablecoin,” “real-world asset tokenization,” or “RWA” in their names or business scope. They shall also work with financial authorities to strengthen supervision of related advertisements and promptly investigate and deal with illegal advertisements.

(9) Continue to rectify virtual currency “mining” activities. The National Development and Reform Commission, together with relevant departments, shall strictly control virtual currency “mining” activities and continue to promote rectification work. Provincial governments shall be responsible for the rectification within their regions, thoroughly investigate and shut down existing virtual currency “mining” projects in accordance with the “Notice on Rectifying Virtual Currency ‘Mining’ Activities” (Fagai Xingdong [2021] No. 1283) and the “Guidance Catalog for Industrial Structure Adjustment (2024 edition).” New “mining” projects are strictly prohibited, and “mining machine” manufacturers are forbidden from providing sales and related services within the country.

(10) Crack down on illegal financial activities. Upon discovering clues related to illegal financial activities involving virtual currencies and real-world asset tokenization, local financial authorities, branches, and dispatched agencies shall investigate, verify, and handle them lawfully and properly, and hold relevant units and individuals accountable according to law. Criminal suspects shall be transferred to judicial authorities for handling.

(11) Crack down on related illegal crimes. The Ministry of Public Security, People’s Bank of China, China Banking and Insurance Regulatory Commission, China Securities Regulatory Commission, and other departments, as well as judicial and prosecutorial organs, shall, according to their responsibilities, severely crack down on crimes such as fraud, money laundering, illegal operation, pyramid schemes, illegal fundraising, and other illegal activities related to virtual currencies and real-world asset tokenization, including related illegal activities conducted under the guise of virtual currencies or tokenization.

(12) Strengthen industry self-discipline management. Industry associations shall strengthen member management and policy publicity, based on their responsibilities, advocate and supervise member units to resist illegal financial activities related to virtual currencies and real-world asset tokenization. For members violating regulatory policies or industry self-discipline rules, sanctions shall be imposed according to relevant self-regulation rules. They shall also conduct risk monitoring related to virtual currency and real-world asset tokenization through industry infrastructure and promptly transfer problem clues to relevant authorities.

4. Strict Supervision of Domestic Entities Going Abroad for Related Activities

(13) Without the approval of relevant authorities, domestic entities and their controlled overseas entities shall not issue virtual currencies abroad.

(14) Domestic entities directly or indirectly engaging in foreign debt-based real-world asset tokenization activities, or conducting asset securitization or equity-like real-world asset tokenization activities abroad based on domestic rights and interests (hereinafter collectively referred to as “domestic rights and interests”), shall be subject to strict supervision by the National Development and Reform Commission, China Securities Regulatory Commission, State Administration of Foreign Exchange, and other relevant departments according to their responsibilities, following the principle of “same business, same risk, same rules.” Other forms of real-world asset tokenization activities conducted abroad based on domestic rights and interests shall be supervised by the China Securities Regulatory Commission in conjunction with relevant departments. No unit or individual shall carry out the above activities without approval or filing.

(15) Overseas subsidiaries and branches of domestic financial institutions providing real-world asset tokenization services shall operate prudently and legally, equipped with professional personnel and systems, effectively prevent operational risks, strictly implement customer access, suitability management, anti-money laundering, and other requirements, and incorporate these into their compliance and risk control systems. Agencies providing services for domestic entities engaging in foreign debt-based real-world asset tokenization or related activities based on domestic rights and interests shall strictly comply with laws and regulations, establish sound internal control systems, strengthen business and risk management, and report or file relevant activities with the relevant regulatory authorities.

5. Strengthen Organizational Implementation

(16) Strengthen organizational leadership and overall coordination. All departments and regions shall attach great importance to the prevention of risks related to virtual currencies and real-world asset tokenization, strengthen organizational leadership, clarify responsibilities, establish a long-term work mechanism with central coordination and local implementation, maintain a high-pressure stance, monitor risks dynamically, and effectively prevent and resolve risks in an orderly manner. They shall protect the property safety of the people according to law and make every effort to maintain economic and financial order and social stability.

(17) Conduct extensive publicity and education. Departments, regions, and industry associations shall utilize various media channels to promote laws, policies, typical cases, and investment risk education related to virtual currencies and real-world asset tokenization, emphasizing the illegality, hazards, and manifestations of such activities, and alert the public to potential risks, enhancing their risk awareness and ability to identify risks.

6. Legal Responsibilities

(18) Those who violate this notice by engaging in illegal financial activities related to virtual currencies and real-world asset tokenization, or providing services for such activities, shall be punished according to relevant laws; if a crime is constituted, criminal responsibility shall be pursued. Units and individuals who knowingly or should have known that overseas entities illegally provide virtual currency or real-world asset tokenization services to domestic entities, and still assist them, shall be held accountable according to law; if a crime is involved, criminal responsibility shall be pursued.

(19) Any unit or individual investing in virtual currencies, real-world asset tokenization, or related financial products that violate public order and good customs shall have their civil legal acts invalid, and any losses incurred shall be borne by themselves; if the act damages financial order or endangers financial security, relevant departments shall investigate and handle according to law.

This notice shall be effective from the date of issuance. The “Notice on Further Preventing and Disposing of Risks of Virtual Currency Trading and Speculation” (Yinfa [2021] No. 237) issued by the People’s Bank of China and other ten departments is hereby repealed simultaneously.

Source: People’s Bank of China

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