On November 28, 2025, the People's Bank of China, the Financial Regulatory Administration, the China Securities Regulatory Commission, and other thirteen ministries and commissions jointly held a coordination meeting on virtual currency. Subsequently, the China Internet Finance Association, the China Banking Association, and other seven associations issued a risk warning (hereinafter referred to as the 'warning') regarding the prevention of illegal activities related to virtual currencies. This document reiterated the regulatory stance on virtual currencies and related activities. The file mentioned 'real-world asset tokens' (RWA) alongside stablecoins, air coins, and 'mining,' which sparked widespread discussion in the market about whether RWA would be fully included in the 'illegal activities related to virtual currencies.'
A close reading of the text reveals that while the regulatory body expresses a firm attitude, it also shows rationality in treating different types of activities differently. It does not equate RWA with stablecoins to illegal forms like air coins, but emphasizes risk warnings and compliance boundaries, leaving room for truly compliant and prudent innovation.
1. RWA is not simply categorized as 'illegal activities' but emphasizes 'multiple risks'.
In the (prompt) text, there are clear distinctions in the descriptions of various virtual currency-related activities. For 'air coins (like π coin)', the document clearly states that they 'lack substantial technological innovation, have no clear business application scenarios and value, have opaque issuance and operation mechanisms, and are severely associated with fraud and market manipulation,' emphasizing that they are often linked with pyramid schemes and fraudulent activities. This qualitative characterization has obvious negative and prohibitive implications.
Regarding 'stablecoins' and 'real-world asset tokens', the document's expression focuses on risk warnings and the current situation description. About stablecoins, the document points out that they 'currently cannot effectively meet customer identity verification, anti-money laundering, and other requirements, and pose risks of being used for money laundering, fundraising fraud, and illegal cross-border fund transfers.' Regarding RWA, the document states that 'financing and trading activities through issuing tokens or other rights and bonds with token characteristics have multiple risks, including false asset risks, business failure risks, speculative risks,' and clearly points out that 'currently, China's financial management authorities have not approved any real-world asset tokenization activities.'
From the wording, it can be seen that the regulatory body has not directly defined stablecoins and RWA as 'illegal activities', but emphasizes the current risks and unapproved status. This expression contrasts with the clear prohibition of air coins, reflecting the regulatory awareness of differentiation. RWA, as a technological path that tokenizes real assets through blockchain, theoretically has advantages in enhancing liquidity and reducing transaction costs, and the regulation does not deny all its potential value, but rather issues warnings regarding the chaos that may arise in the current market.
2. The document constraints focus on 'illegal financial activities' rather than a blanket ban on the entire industry chain.
(Prompt) In parts two and three, clear demands are made for various institutions and the general public. The prohibitive clauses mainly revolve around 'illegal financial activities':
> 'Domestic institutions and individuals engaging in activities such as exchanging legal currency for virtual currency, issuing and financing real-world asset tokens within the country are suspected of illegal issuance of token vouchers, illegal fundraising, unauthorized public issuance of securities, illegal futures operations, and other illegal financial activities.'
> 'Overseas virtual currency and real-world asset token service providers conducting related business activities in China through direct or disguised means are also considered illegal financial activities.'
These regulations clearly target activities conducted within the country that are unapproved for issuance, financing, trading, and providing services for them, focusing on the 'illegality' of the behavior rather than the technology or concept itself. The document requires member units not to provide related services for the 'domestic issuance and trading' of virtual currencies or RWA, and not to provide services for related 'business activities', targeting specific illegal and non-compliant business behaviors.
This means that if an RWA-related activity:
1. Does not involve illegal public offerings or financing within the country;
2. Does not involve providing support for illegal activities within the country;
3. Its operating model itself complies with existing financial laws and regulations, such as through legal channels, targeting qualified investors, completing necessary regulatory approvals and registrations;
4. Especially if it can rely on jurisdictions like Hong Kong that have established virtual asset regulatory frameworks to conduct operations legally and compliantly, while effectively isolating risks from the domestic market;
Thus, it may not directly fall into the scope explicitly prohibited by the (prompt). The document aims to cut off the industrial chain support for illegal activities within the country rather than prohibit all technology discussions, international compliance practices, or forward-looking research related to RWA on a global scale.
3. Compliant exploration of RWA should be based on the legal framework and make good use of the rules of both places.
The RWA we discuss refers to compliant explorations under the existing legal framework, especially those that meet the legal requirements of both mainland and Hong Kong and related cross-border legal norms. Since 2022, Hong Kong has gradually established a relatively comprehensive licensing system for virtual asset service providers (VASP) and has made regulations on the issuance and trading of tokenized securities and other financial products. In 2023, the Hong Kong Securities and Futures Commission further issued circulars regarding tokenized securities and collective investment schemes, providing guidelines for compliant asset tokenization.
In this context, a compliant RWA project may have the following characteristics:
Issuance compliance, i.e., in allowed jurisdictions (like Hong Kong), issuing to qualified investors in accordance with local regulations and completing necessary registrations or approvals.
Assets must be real, corresponding to real, clear, and clearly defined real-world assets, and establish effective auditing, custodial, and information disclosure mechanisms.
Technology compliance, i.e., meeting technical requirements for cybersecurity, data privacy, and anti-money laundering/anti-terrorist financing (AML/CFT).
Service isolation, i.e., related technical development, legal consulting, asset management, etc., strictly follow the laws of the service-providing location and do not involve providing direct support for illegal activities within the country.
Investor suitability management, i.e., strictly implementing investor identity verification and risk tolerance assessments to prevent risk from spreading to the public without identification ability.
Such compliant operations are fundamentally different from the 'false asset risks,' 'speculative risks,' and behaviors such as illegal fundraising and illegal issuance of securities warned about in the (prompt). The goal of regulatory policies is 'good money drives out bad money,' fighting illegal and non-compliant behaviors, protecting investor rights, and maintaining financial stability, rather than hindering truly valuable and compliant financial technology innovations.
4. Coordination meeting and (prompt): Potential benefits for compliant operations and clear warnings for illegal operations.
The convening of the work coordination meeting by thirteen ministries and the release of the seven associations (prompt) can be seen as a concentrated response to the current market chaos and risk clearance. Its core impact lies in:
Clarifying red lines and purifying the market: The most direct effect is the severe crackdown and clearance of activities disguised as RWA and stablecoins that involve pyramid schemes, fraud, illegal fundraising, etc. (especially air coins like π coin), to restore the industry's reputation and avoid 'bad money driving out good money.'
Enhancing institutional responsibility: requiring banks, payment, securities, internet platforms, and various institutions to strengthen due diligence to cut off the funding, publicity, and technical support channels for illegal activities, which increases the operational costs and risks of illegal activities.
Educating the public and raising awareness: Prompting the public about risks through authoritative channels helps reduce irrational speculative sentiment and cultivate rational investment concepts.
For institutions and projects that consistently pursue compliant operations, this policy signal may bring cautious market sentiment in the short term, but in the medium to long term, it is actually positive: first, the clarity of regulations reduces uncertainties in 'gray areas', making compliance rules clearer; second, the purification of the market environment helps compliant projects gain more rational market attention and resource tilt; third, emphasizing 'risks' and 'not approved' rather than 'prohibiting everything' leaves policy interfaces for future compliant pilot projects when conditions mature and rules are clarified.
5. Rational considerations under a firm attitude: differentiated treatment and risk-based.
Looking at the actions of the thirteen ministries and the seven associations, it shows a firm attitude, but also a rational regulatory wisdom.
The firm attitude is reflected in: zero tolerance for any form of illegal financial activities, resolutely maintaining national financial security and social stability; clearly prohibiting and severely cracking down on activities that attempt to circumvent existing legal frameworks to conduct illegal issuance, trading, and provide services within the country; promptly addressing current market speculation hotspots to control risks.
Rational thinking is reflected in: differentiated treatment of different types of virtual currency-related concepts, prohibiting activities with obvious fraudulent attributes such as air coins, while emphasizing the inherent risks and current regulatory status of stablecoins and RWA; risk-based, regulatory measures focus on the illegality and substantive risks of specific behaviors rather than a blanket denial of technology or concepts; leaving room for future compliant explorations under the premise of improving rules and managing risks while emphasizing 'not approved' and risks.
This rationality arises from a profound understanding of the complex relationship between financial innovation and risk prevention. Blockchain technology and asset tokenization have their potential value, but must develop in an orderly manner within an effective legal and regulatory framework. The current regulatory stance is a prudent balance prioritizing the prevention of real risks while leaving room for future compliant development.
In summary, the work coordination meeting of thirteen ministries and the seven associations (risk warning) lists RWA and stablecoins as areas of risk concern but does not simply equate them with illegal activities like air coins. The core of the document is to combat various illegal financial activities conducted within the country and their industrial chain support, aiming to delineate red lines, purify the market, and protect investors.
For market participants, the key is not to fear the concept, but to respect the law and risk. Any exploration involving RWA or stablecoins must prioritize compliance, strictly adhere to domestic and foreign laws and regulations, especially avoiding involvement in illegal issuance, trading, and providing services for them within the country. Within the existing legal framework, especially in jurisdictions like Hong Kong that have established relevant rules, compliant and prudent exploration remains a possible path.
The recent regulatory statement, in the short term, serves as a 'warning sign' and 'clean-up crew' for chaos, but in the long term, it may be a 'traffic light' and 'cornerstone' for the industry's move towards standardized development. It conveys a clear message: China's financial regulation maintains a rational observation and assessment of cutting-edge technologies while adhering to safety bottom lines. There is attitude, and there is rationality, which may be the regulatory norm that emerging financial technology sectors must understand and adapt to for long-term development in the Chinese market. Future opportunities will undoubtedly belong to those who can embrace technological innovation while deeply understanding and adhering to the spirit of compliance.
