Tonight, seven industry associations spoke out simultaneously.
China Internet Finance Association, China Banking Association, China Securities Association, China Asset Management Association, China Futures Association, China Association of Listed Companies, China Payment and Clearing Association.
This lineup was last seen in September 2021.
That time, they jointly blocked cryptocurrency transactions.
This time, their targets are broader: air coins, stablecoins, RWA tokenization, and cryptocurrency mining. They'll leave no stone unturned.
This is the first time the authorities have explicitly included RWA in their crackdown efforts.
Why now?
BlackRock's $2 billion BUIDL fund, Franklin Templeton's partnership with Binance, and the influx of traditional financial institutions—as this sector moves from the periphery to the mainstream, regulatory red lines are also being drawn.
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01 | What does the alliance of seven associations mean?
This lineup last appeared on September 24, 2021.
On that occasion, 10 departments jointly issued a notice (on further preventing and handling risks associated with virtual currency trading and speculation).
This directly led to all cryptocurrency exchanges leaving China, all mining farms closing down, and China's share of Bitcoin hashrate plummeting from 75%.
This time, seven industry associations jointly issued a risk warning regarding preventing illegal activities involving virtual currencies.
Why these seven companies?
You'll understand once you look at their functions:
China Banking Association + China Payment and Clearing Association: Managing Funding Channels
Securities Association of China + Asset Management Association of China + China Futures Association: Regulating Financial Products
Internet Finance Association: Regulating online platforms
Listed Companies Association: Preventing A-share companies from getting involved
What does this configuration mean?
This means that all possible touchpoints in the cryptocurrency ecosystem are being monitored.
You want to withdraw money from the bank? The banking association says no.
Want to buy USDT using Alipay or WeChat? The Payment & Clearing Association says no.
You want to issue tokenized securities? The Securities Association says no.
You want to start a cryptocurrency fund? The Asset Management Association of China says no.
You want to advertise on internet platforms? The Internet Finance Association says no.
You want A-share listed companies to develop Web3? The Listed Companies Association says no.
This is not a targeted crackdown on a specific area, but a coordinated blockade across industries.
From exchanges and mining farms to payment channels and technical services, the entire chain is strictly guarded.
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02 | What was the first strike against RWA?
The most noteworthy sentence in this risk warning is:
"Real-world asset tokenization facilitates financing and trading activities by issuing tokens or other rights and debt instruments with token characteristics."
There are multiple risks involved, including the risk of fictitious assets, the risk of business failure, and the risk of speculation. Currently, my country's financial regulatory authorities have not approved any real-world asset tokenization activities.
Note these words: "No approvals have been made."
This is the first time the authorities have explicitly included RWA in their crackdown efforts.
Consider these figures: By the end of 2024, the global RWA tokenization market had surpassed $30 billion. BlackRock's BUIDL fund had reached $2 billion in size.
Franklin Templeton announced a partnership with Binance in September 2024 to develop tokenized products. In three years, the RWA market has grown nearly fourfold.
This is not a small-scale project; it's the full-scale entry of traditional financial giants.
Why are regulators so vigilant?
On the surface, RWA tokenization seems like a good thing: it improves asset liquidity, reduces transaction costs, and allows ordinary people to invest in high-barrier assets.
But what is the essence of it? It is a new tool to bypass foreign exchange controls, securities regulations, and anti-money laundering reviews.
Imagine this scenario:
You own a property in China worth 5 million RMB.
Find an "RWA platform" to tokenize the property and issue 500,000 tokens.
You transfer these tokens to an overseas wallet on-chain.
You sell the tokens on an overseas exchange and exchange them for USDT.
You then sell the USDT and convert it into USD.
The entire process involves no bank, no foreign exchange bureau, and leaves no record.
This is what regulators are really preventing.
The policy document specifically mentions three major risks:
Risk of fictitious assets: I say I own a house, but I don't. Who can verify that?
Risk of business failure: If the RWA platform disappears, where will you find your assets?
Speculative risks: Real estate tokens are worth 10 yuan today and 100 yuan tomorrow. Is this an asset or gambling?
The deeper question is:
Allowing RWA tokenization would be tantamount to creating a huge loophole in foreign exchange controls.
Do you remember what happened in 2015? Under the pressure of RMB devaluation, foreign exchange reserves lost nearly $1 trillion in a year.
What methods were used for capital flight back then? Underground banks, false trade reports, and overseas insurance policies. Complex, slow, and costly.
If the RWA + USDT combination had existed at the time, the destructive power would have been 10 times greater.
That's why this policy was described in five words: "No approvals."
It's not about "temporarily not approving" or "approving if the conditions are met," but rather a complete and absolute ban.
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03 | From Pi Coin to Mining: The Cleanup Logic of "Multi-Frontline Operations"
This risk warning is not aimed at any one project, but at the entire cryptocurrency ecosystem.
The policy document lists four main objectives:
Target 1: Air coins (represented by Pi coins)
Original policy text:
“Picoin and other worthless cryptocurrencies lack substantial technological innovation, have no clear commercial application scenarios or value, have opaque issuance and operation mechanisms, and are prone to fraud and market manipulation. They are also frequently used as a pretext for pyramid schemes and fraudulent activities.”
The story of Pi Coin is typical: it was launched in 2019, claiming to be "mobile mining." It was once listed as a legitimate online cryptocurrency exchange.
In July 2023, authorities in Hengyang, China, classified Pi Coin as a "pyramid scheme."
Its referral-driven growth model has been criticized as a "multi-level marketing (MLM) structure," where users must complete KYC verification before they can withdraw their funds, but the KYC data is stored on a centralized server.
Targets: Pyramid scheme-style promotion, false promises, and exploitation of individual investors.
Objective 2: Stablecoins (reiterated)
Original policy text:
"Stablecoins currently cannot effectively meet the requirements for customer identification and anti-money laundering, and there is a risk that they may be used for illegal activities such as money laundering, fundraising fraud, and illegal cross-border transfer of funds."
This reiterates the characterization made at the central bank meeting on November 28: stablecoins = virtual currencies.
Targets: Cross-border payments, over-the-counter transactions, and circumventing foreign exchange controls.
Objective 3: Cryptocurrency Mining
Original policy text:
"Be wary of illegal fundraising and illegal securities issuance activities carried out under the guise of virtual currency 'mining'."
The regulatory history of cryptocurrency mining in China: From 2017 to 2020, China was the world's largest Bitcoin mining country, accounting for 60-75% of the computing power. After a complete ban in September 2021, China's computing power share plummeted. This December, there was renewed vigilance against "illegal fundraising under the guise of mining."
Why reiterate?
In recent years, numerous Ponzi schemes disguised as cryptocurrency mining projects, such as "cloud computing power" and "distributed storage," have emerged, claiming that "investing in mining machines will bring you profits."
It's actually a Ponzi scheme: using money from new investors to pay returns to older investors.
Targets: Illegal fundraising and Ponzi schemes disguised as mining.
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The logic of four layers of lockdown
If you look at these four goals together, you'll discover a clear logic for cleanup.
First layer: Infrastructure layer (mining)
Cut off the source of production. Prevent you from producing virtual currency within the country.
Second layer: Payment instrument layer (stablecoins)
Cut off the circulation channels. Prevent you from using stablecoins for payments and cross-border transfers.
The third layer: Asset On-Chain Layer (RWA)
Block the path to compliance. Prevent you from using "asset tokenization" as a guise for capital outflow.
Fourth layer: Scam cleanup layer (air coins)
Protect individual investors. Prevent ordinary people from being exploited by pyramid schemes.
Four layers of sealing, not a drop of water leaked.
This is a "carpet cleanup" of the entire ecosystem.
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04 | Hong Kong's Role: The "Offshore Testing Ground" Still Has Boundaries
Many people ask: What about Hong Kong?
Hong Kong launched its stablecoin licensing regime on August 1, 2024. Currently, 80 companies have applied, and the first batch of licenses is expected to be announced in early 2026.
The Hong Kong Monetary Authority (HKMA) clarified that only a single-digit number of people will receive the first batch of grants.
What can Hong Kong do?
Stablecoin licensing: Facilitating offshore USD settlement
RWA pilot program: but it must involve offshore assets and offshore users.
Virtual asset trading platforms: Licensed operators (such as HashKey, OSL)
What is the core?
Three "no's":
Unable to serve mainland users
No RMB business allowed
It cannot be used as a channel for the inflow and outflow of funds.
But many entrepreneurs think, "If I register a company in Hong Kong, I should be able to bypass regulations, right?"
cannot.
There is a crucial sentence in the documents from the seven associations:
"Domestic staff of overseas virtual currency service providers, as well as domestic institutions and individuals who knowingly or should have known that they are engaged in virtual currency-related businesses but still provide services to them, will be held accountable in accordance with the law."
What does this sentence mean?
This means that regulators focus on substance, not form.
Who are your users?
Where does your funding come from?
Where is your team?
Where does your business go?
If any link in the chain is connected to the domestic area, it is considered high-risk.
Hong Kong is not a "back door" to the mainland, but an offshore market with strict borders.
Those that can obtain licenses are large banks like Standard Chartered and HSBC, not startups.
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05 | Risk Warnings for the Industry
See the policy documents for the requirements of various institutions:
Banks and payment institutions:
"Provide services for business activities related to the issuance and trading of virtual currencies and real-world asset tokens within the territory, and provide any form of financial services and credit support to virtual currency 'mining' enterprises and projects."
Securities, fund, and futures institutions:
"Provide services for the issuance and trading of virtual currencies, real-world asset tokens and related financial products within the territory."
Internet platform companies:
"No marketing, information technology or other services shall be provided for business activities related to the issuance and trading of virtual currencies and real-world asset tokens within the territory."
Note this last point: Marketing and promotion, information technology, and other services.
This means:
Do you think you can get away with saying "I'm just providing technical services"? No.
You think it's okay just because "I'm only doing marketing"? No.
Do you think it's safe just because "I'm only making a wallet SDK"? No.
If your clients are domestic virtual currency businesses, it is considered high-risk.
If your clients are domestic virtual currency businesses, it is considered high-risk.
Special warning: Communities and directing registrations are also illegal.
This policy specifically emphasizes one new addition:
"Be wary of joining communities that promote virtual currencies or real-world asset tokens."
what does that mean?
Creating cryptocurrency communities (WeChat groups, QQ groups, Telegram groups): is illegal.
Guiding users to register on exchanges: is illegal.
Acting as an agent, traffic driver, or customer service representative for an exchange is illegal.
Sharing registration links or invitation codes is illegal.
The policy document clearly states: "If any clues are found involving business activities related to virtual currencies or real-world asset tokens, they should be reported to the relevant regulatory authorities in a timely manner, and if any suspected illegal or criminal activities are found, they should be reported to the public security authorities in a timely manner."
This is a very clear signal: regulators will not only crack down on exchanges and project teams, but also hold the "promoters" and "introducers" in between accountable.
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High-risk operations (stop immediately):
Domestic stablecoin exchange
Provide RWA tokenization services to domestic users
Promoting Pi Coin and other worthless cryptocurrency projects
Any business conducted under the guise of mining
Establish cryptocurrency-related communities and guide users to register with exchanges.
Provide technical support, marketing services, and payment channels for the above businesses.
Medium-risk business (assessment adjustment):
Registered in Hong Kong but actually serving mainland users
Providing "pure technical outsourcing" but the client is a cryptocurrency platform.
Blockchain technology services, but involving tokenization
Feasible directions:
Completely going global: users, funding, and team are all overseas.
Digital RMB ecosystem: payments, wallets, merchant services
Consortium blockchains and enterprise blockchains: do not involve tokens.
Web3 infrastructure: does not directly touch assets and payments
Most importantly:
Don't take chances.
Do not test regulatory boundaries
Don't think that "I'm just doing technical work" absolves you of responsibility.
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The risk warning issued on December 5th is unprecedented in recent years in terms of its high level of detail and broad scope.
The joint action by the seven associations is not aimed at any particular project, but at the entire cryptocurrency ecosystem.
From infrastructure to payment tools, from asset tokenization to fraud cleanup, this is a "carpet sweep".
In particular, the inclusion of RWA tokenization in the crackdown for the first time signifies that regulators have become increasingly wary of the "compliance narrative."
For practitioners, this is not a "negative factor," but rather a "boundary."
Only by understanding where the boundaries are can we know which paths are viable and which are impassable.
Knowing clearly which side of the boundary you stand on is a prerequisite for survival.
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Finally, the above content is for risk warning and industry observation only.
