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You can turn anything into a meme, but remember to cherish this cathedral
Recently, I read an open letter from IOSG founder Jocy to the Chinese Crypto OG. In the letter, Jocy quoted a phrase from Buffett: "Over the next 100 years, make sure the cathedral is not devoured by the casino."
Jocy used this metaphor to describe the dilemma of the crypto industry: on one side, there is a magnificent cathedral built with code and ideals, and on the other side, there is a huge casino filled with speculation and hype.
Just days after sending out this letter, a developer named Peter Steinberger saw overnight success with his open-source AI project, Clawd bot, which he developed in his spare time.
However, on the day the project went viral, a group of cryptocurrency speculators quickly launched a meme coin called CLAWD without Peter's knowledge, driving its market value up to $16 million at one point. Subsequently, Peter tweeted that he would never create any cryptocurrency, stay away from any meme coins, and asked "Crypto Folks" not to harass him anymore.
The speculators believed Peter's statement caused a price crash and, during the project renaming process, took over his GitHub account. They launched a frenzy of cyberattacks and personal harassment against him, demanding that Peter take responsibility for this scam created by the speculators themselves.
This is perhaps the moment recently when I least wanted to admit I was part of the crypto industry.
The entire crypto industry is going through a major collapse. The prosperity of the casino, instead of benefiting the cathedral, is actively destroying those who are trying to build the cathedral.
From the genesis block of Bitcoin mined by Satoshi Nakamoto in 2009 to 2026, what has happened to the crypto industry in these seventeen years? How has that cathedral built with code and ideals been transformed step by step into a casino filled with dice rolls and wails?
The Cathedral's Bell
To answer this question, let's go back to the beginning, back to the era when the bell still rang clearly.
For a long time after the birth of Bitcoin, the mainstream narrative of this industry was about construction. Early participants, mostly cypherpunks, libertarians, and tech geeks, were obsessed with the decentralized utopia outlined by Satoshi Nakamoto and sought to contribute to this cathedral with lines of code.
Even the most famous Memecoin in this industry, Dogecoin, originally shone with idealistic light.
In December 2013, software engineers Billy Markus and Jackson Palmer, working at IBM and Adobe, decided to create a "ridiculous" cryptocurrency to satirize the escalating cryptocurrency speculation at the time. Markus made slight modifications to the Bitcoin code, changed the font to a whimsical comic sans, and replaced the Bitcoin icon with an internet-popular Shiba Inu meme. Thus, Dogecoin was born.
"It was just meant to be a joke," Markus later recalled in an open letter, "We didn't have any expectations or plans."
But this joke unexpectedly gave rise to one of the most unique communities in the crypto world. Early Dogecoin adopters were not concerned about price fluctuations; they were enthusiastic about a tipping culture, using Dogecoin worth less than a cent to tip content they enjoyed on social media. They, in this almost free manner, spread joy, kindness, and creativity.
In 2014, they raised $30,000 worth of Dogecoin for the underfunded Jamaican bobsleigh team, helping them compete in the Sochi Winter Olympics; they fundraised for water-scarce regions in Kenya, building wells; they even sponsored a NASCAR driver named Josh Wise, featuring the Shiba Inu logo on the race car, speeding through America's most popular auto racing events.
"Joy, kindness, learning, giving, empathy, fun, community, inspiration, creativity, generosity, silliness, and absurdity," Markus defined Dogecoin's true value in this way in the open letter, "If the community embodies these things, then that is the real value."
This is one of the most poignant side stories of the cathedral era. In that era, people believed that the power of consensus could turn a joke into a force for good.
This enthusiasm for building reached its peak during the DeFi Summer of 2020. Ethereum's builders used smart contracts to construct a permissionless, trustless decentralized financial world. From decentralized exchanges like Uniswap to lending protocols like Compound and Aave, financial applications like Lego bricks were assembled, and the total value locked in the crypto world soared from under $700 million to $117.6 billion in just a year. A new financial paradigm is slowly rising on the horizon.
By 2021, the taste started to go sour. That year, under the impact of the COVID-19 pandemic, global central banks embarked on an unprecedented money-printing spree, with the U.S. alone rolling out a stimulus package as high as $5 trillion. Trillions of hot money flooded into the market, searching for any speculative assets. Cryptocurrency became the wildest main course in this liquidity feast.
Bitcoin's price surged by 788% in a year, and Ethereum rose by 1264%. According to surveys, half of the stimulus checks received by 25- to 34-year-old Americans went into cryptocurrency and the stock market.
Money had never been so cheap; the dream of getting rich overnight had never been so real.
The bells of the cathedral were gradually drowned out by the sound of dice rolling in the casino.
The Ochlocracy of the Mob
French social psychologist Gustave Le Bon made a precise observation in his work "The Crowd: A Study of the Popular Mind":
"Once an individual is part of a crowd, he will no longer bear responsibility for his actions. At this point, everyone will reveal instincts of constraint they would have when alone. ... The crowd is impulsive, fickle, and irritable. It is entirely governed by unconscious motivations."
In the post-2021 crypto world, when the community is no longer united by a common vision and values but merely by a fragile interest in holding together, "community-driven" quickly morphs into the "ochlocracy of the mob."
The first to be sacrificed was the spirit animal of Dogecoin, its creator Billy Markus.
As Dogecoin was hyped to hundreds or thousands of times its value in 2021, Markus's social media inboxes were flooded with a tidal wave of messages, with people frantically demanding him to "do something" to make their Dogecoins more valuable.
They did not care that Markus had already sold all his Dogecoins back in 2015 after being laid off, only receiving a used Honda in return; they also did not care that Markus's mother was on the brink of losing her home due to being unable to pay the mortgage.
They only cared about themselves.
"When I see pumping and dumping, greed, scams, those things," Markus wrote in an open letter, "I'm not angry, just disappointed."
If attacking Markus was merely the prelude to this tyranny, then the siege on Vitalik escalated this farce to its first climax.
In May 2021, with no prior communication, SHIB sent 50% of the project's total token supply directly to Vitalik's public wallet address, then valued at a staggering $8 billion. Their calculus was cunning—the community regarded Vitalik as a "god" of the crypto world, so as long as he didn't sell, it was seen as the strongest endorsement for SHIB; if he did sell, a large chunk of tokens would be burned, also seen as a positive.
It was a meticulously crafted moral blackmail. They placed Vitalik in a dilemma where any choice he made seemed to only serve the interests of speculators.
However, Vitalik decisively executed a rejection of this sacrifice. He donated SHIB tokens worth $1.3 billion to India's COVID-19 relief fund, burned most of the remaining tokens, sold off a significant amount of meme coins he received as "donations," and made genuine donations to charity organizations.
Like a stern headmaster, he attempted to awaken the meme frenzy devotees through repeated rug pulls. From 2021 to 2025, he sold and donated meme coins he received multiple times, converting them into funds for animal welfare, biotech research, and disaster relief. He even openly urged, "I hope meme coin creators can donate directly to charities rather than sending coins to me."
Yet his resistance appeared feeble in the face of collective speculative desire. Followers quickly found new justifications for his actions: "Vitalik is helping us burn tokens, this is a positive!" "Vitalik is marketing, he is actually supporting us!"
In the crowd logic described in "The Crowd: A Study of the Popular Mind," all facts can be twisted to serve the collective emotion and fantasy.
If Vitalik's sacrifice carried a hint of religious absurdity, by 2026, when the iron fist of the tyranny struck Clawd bot's developer Peter Steinberger, it had evolved into a brazen kidnapping.
Speculators no longer needed a god's endorsement; they could directly "create" a god and then hitch him to their own bandwagon. When Peter refused to create a platform for the fraudulent CLAWD scheme they proposed, he shifted from a celebrated hero to a traitor who must be eliminated. Account hijacking, verbal attacks, private message harassment... every means was employed just to force his compliance.
They rule in the name of the community, exercise tyranny in practice, with the only manifesto being the candlestick chart.
When a community of an industry, transitioning from a collaborative network based on a common ideal, descends into a violence machine based on a common position, what level of disaster does it produce?
11.6 Million Bullets
The answer: a collective suicidal prosperity.
According to the annual report released by the cryptocurrency data analysis company CoinGecko, in 2025, the crypto world collectively created 11.9 million new tokens. This means that, on average, over 32,000 new "assets" are born every day. A corresponding set of data is that in the same year, 11.6 million crypto projects met their demise.
For comparison, at the peak of the 2021 bull market, the number of failed projects that year was 2,584. In four years, this number has increased by 4,489 times.
When minting coins becomes an industry, what we get is not the diversity of value but the scale of garbage.
The occurrence of this disaster is the result of the combined effects of technological progress, macro liquidity injection, and human greed. On the one hand, next-generation public chains like Solana have increased transaction speeds by 100 times and reduced costs by 1,000 times. The emergence of tools like pump.fun, enabling coin issuance for a few dollars, has lowered the barrier to minting from creating a new blockchain to clicking a mouse. Technological advancement has unexpectedly provided a perfect breeding ground for the scale of the disaster.
On the other hand, the unprecedented global liquidity flood of 2020-2021 fundamentally altered the market's risk appetite. When money is no longer valuable, when traditional value investment returns are pitifully low, people start crazily chasing volatility. The question of whether an asset has value is no longer important; what matters is whether it can provide enough volatility to satisfy people's desire for rapid wealth accumulation.
Thus, we witnessed the most absurd scene in the crypto world: the entire industry racing to memeify.
Those social apps claiming to disrupt Web2, those blockchain games claiming to build the metaverse, those star projects boasting Layer2 scaling solutions—all their tokens' sole existence value is for retail traders to trade on the secondary market.
When a Layer2 token has no fundamental difference in functionality from a Shiba Inu coin, we have to admit that within the casino, everything is a meme.
This 11.6 million reset token is like 11.6 million bullets aimed at the future of the crypto world. Each one is declaring to the world that this industry is untrustworthy. And when an industry's incentive mechanism is fully tilted towards speculation rather than innovation, what price will those who truly want to build cathedrals pay?
Death of Builders
They are experiencing a triple death.
The first death is the social death of the body and spirit.
The ordeal of Clawd bot's developer Peter Steinberger is just a microcosm of the plight of countless builders. When a developer invests months or even years of effort to create a truly valuable, popular product, what they may receive is not flowers and applause, but a group of sharks smelling blood.
They turn your project, your name, your reputation into chips in their casino. If you comply, you become an accomplice to the scam; if you resist, you become an enemy that must be eliminated.
The second death is the idol death of spiritual leaders.
V God's resistance is a Quixotic tragedy. He tried to combat the industry's decline with personal power. He sold off, donated, and openly appealed time and time again, but what he got in return was the ridicule of the mob and an increasingly ruthless hijacking.
When the altruistic deeds of an industry's spiritual leader are only interpreted as bullish signs by gamblers, that industry loses its final scrap of moral decency.
In this twilight of the idol, the beacon of spirit is completely extinguished.
The third death is the capital death of top-level design.
When the meme coin's gambling image becomes the industry's most vivid label, smart money that seeks long-term value investment also begins to hesitate. In 2025, Eddy Lazzarin, Chief Technologist at a16z crypto, a top crypto VC known for daring to bet on the future, publicly stated on social media: "Meme coins are harming the long-term vision of many builders. It looks like, at best, a risky casino."
This is not just an executive's complaint, it's a dangerous signal. It means that the industry's top-level designers are losing confidence in the future. When capital is no longer willing to fund cathedral projects that require long-term commitment, but only wants to chase short-term gambling games, the source of innovation is completely cut off.
Even more deadly, the proliferation of Meme coins has provided global regulatory bodies with the most perfect ammunition. It has led the entire industry to be labeled as fraudulent, money laundering-prone, and high-risk speculation, causing projects and companies that have worked for years to achieve compliance to be unjustly accused. By 2025, collective lawsuits against platforms like pump.fun have begun citing the U.S. RICO Act, originally designed to combat the Mafia.
We once gazed at the stars, dreaming of code changing the world; now we are mired in the mud, searching for the next 100x coin within animal and celebrity images. When builders are exiled, when thought leaders are dissolved, when both capital and regulation signal red flags, what do we have left?
The tolling of the bell, the clatter of dice, the sighs, all resound in the ears
Seventeen years ago, Satoshi Nakamoto, in the genesis block, referenced a headline from The Times, envisioning a fair financial world that would not inflate currency or be at the mercy of corrupt banks.
Seventeen years later, as a developer is besieged for creating something of value, we must admit that this industry is rapidly proving itself unworthy of the future.
As this frenzy recedes, what will remain is a vast wasteland of trust. Upon this wasteland, we must choose whether to continue playing the game of survivorship bias or to rediscover our original intentions, to discern, follow, and become those who still persist in tolling the bells of the cathedral amidst the ruins.
This will be a question that every participant in the crypto world cannot evade. The tolling of the bell, the clatter of dice, the sighs, will resound in the sky of this industry for a long time.
For a long time.
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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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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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