Who are the thirteen ministries and seven associations lashing out at?

Author: Zhang Feng

On November 28, 2025, thirteen ministries and commissions, including the People's Bank of China, the State Financial Regulatory Commission, and the China Securities Regulatory Commission, jointly convened a coordination meeting on virtual currency-related work. Subsequently, seven associations, including the China Internet Finance Association and the China Banking Association, issued the "Risk Warning on Preventing Illegal Activities Involving Virtual Currencies" (hereinafter referred to as the "Warning"), reiterating their regulatory stance on virtual currencies and related activities. The document listed "Real-World Asset Tokens" (RWA) alongside stablecoins, worthless cryptocurrencies, and "mining," sparking widespread discussion in the market about whether RWA should be comprehensively included in "illegal virtual currency-related activities."

I. RWA is not simply listed as "illegal activity," but rather emphasizes "multiple risks"

In the main text of the "Notice," there are significant differences in the descriptions of various virtual currency-related activities.

Regarding "air coins (such as Pi Coin)," the document explicitly states that they "lack substantial technological innovation, have no clear commercial application scenarios and value, have opaque issuance and operation mechanisms, and are prone to fraud and market manipulation," emphasizing their frequent association with pyramid schemes and fraudulent activities. This characterization is clearly negative and prohibitive. As for "stablecoins" and "real-world asset tokens," the document focuses on risk warnings and current status descriptions. Regarding stablecoins, the document points out that they "currently cannot effectively meet the requirements for customer identification and anti-money laundering, and pose a risk of being used for illegal activities such as money laundering, fundraising fraud, and illegal cross-border fund transfers." Regarding RWA, the document states that its "financing and trading activities through the issuance of tokens or other rights or debt instruments with token characteristics involve multiple risks, including the risk of fictitious assets, the risk of business failure, and the risk of speculative trading," and explicitly points out that "currently, my country's financial regulatory authorities have not approved any real-world asset tokenization activities." From the wording, it can be seen that the regulators have not directly characterized stablecoins and RWA itself as "illegal activities," but rather emphasized their current risks and their lack of approval. This statement contrasts with the explicit ban on "air coins" (cryptocurrencies with no real value), reflecting the regulator's differentiated approach. RWA, as a technological path that tokenizes physical assets through blockchain, inherently possesses theoretical advantages such as improved liquidity and reduced transaction costs. The regulator has not denied all its potential value, but rather is issuing a warning against potential market irregularities. The document's scope focuses on "illegal financial activities," rather than a blanket ban across the entire industry chain. The "Notice" sets forth clear requirements for various institutions and the general public in Parts Two and Three. Its prohibitive clauses mainly revolve around "illegal financial activities": "Domestic institutions and individuals engaging in activities such as exchanging legal tender for virtual currency, issuing and financing real-world asset tokens, etc., within the territory are suspected of illegally issuing token vouchers, illegally raising funds, unauthorized public issuance of securities, illegally operating futures businesses, and other illegal financial activities." "Overseas virtual currency and real-world asset token service providers, whether directly or indirectly providing services to related business activities within my country through various means, also constitute illegal financial activities." These provisions clearly target... The document targets unauthorized issuance, financing, trading, and related services conducted within China. Its core focus is on the "illegality" of the activity, not the technology or concept itself. Member units are prohibited from providing services for "domestic issuance and trading" of virtual currencies or RWA, and from providing services for related "business activities." The regulation targets specific illegal and irregular business activities. This means that if an RWA-related activity: 1. Does not involve illegal public offerings or financing within the territory; 2. Does not involve providing support for illegal activities within the territory; 3. Its operating model itself complies with current financial laws and regulations, such as through legal channels, targeting qualified investors, and completing necessary regulatory approvals and registrations; 4. Especially if it can rely on jurisdictions such as Hong Kong that have established virtual asset regulatory frameworks, operate legally and compliantly, and effectively isolate itself from the domestic market; then it may not directly fall into the scope of what the "Notice" explicitly prohibits. The document aims to cut off the supply chain support for illegal activities within the country, rather than prohibiting all technical discussions, international compliance practices, or forward-looking research related to RWA globally. III. Compliant RWA Exploration Should Be Based on the Legal Framework and Make Good Use of the Rules of Both Places The RWA we are discussing should refer to compliant exploration within the existing legal framework, especially in accordance with the legal requirements of both the Mainland and Hong Kong and relevant cross-border legal norms. Since 2022, Hong Kong has gradually established a relatively comprehensive licensing system for Virtual Asset Service Providers (VASPs) and has made provisions for the issuance and trading of financial products such as tokenized securities. In 2023, the Hong Kong Securities and Futures Commission further issued a circular on tokenized securities and collective investment schemes, providing guidance for compliant asset tokenization. In this context, a compliant RWA project may possess the following characteristics: compliant issuance, meaning that it is issued to qualified investors who meet local regulations in a permitted jurisdiction (such as Hong Kong) and the necessary registration or approval is completed. Asset authenticity means corresponding to real-world assets that are authentic, clear, and have clearly defined ownership, and establishing effective auditing, custody, and information disclosure mechanisms. Technical compliance means meeting the technical requirements for cybersecurity, data privacy, and anti-money laundering/counter-terrorist financing (AML/CFT). Service segregation, meaning that related technical development, legal consulting, asset management, and other services strictly comply with the laws of the service provision location and do not involve providing direct support for illegal activities within the country. Investor suitability management, meaning strictly implementing investor identification and risk tolerance assessment to prevent the spread of risk to the public who lack the ability to identify risks. Such compliant operations are fundamentally different from the "fake asset risks," "speculative risks," and illegal fundraising and securities issuance activities warned against in the "Notice." The goal of regulatory policies is to "drive out bad money with good money," crack down on illegal and irregular activities, protect investors' rights and interests, and maintain financial stability, rather than hinder truly valuable and compliant financial technology innovation. The coordination meeting and the "Notice": Potential benefits for compliant operations and a clear warning against illegal operations. The convening of this coordination meeting of thirteen ministries and the release of the "Notice" by seven associations can be seen as a concentrated response to the current market chaos and a risk mitigation effort. Its core impact lies in: **Clearly defining red lines and purifying the market:** The most direct effect is the severe crackdown and elimination of pyramid schemes, fraud, and illegal fundraising activities operating under the guise of RWA or stablecoins (especially worthless coins like Pi), thus restoring the industry's reputation and preventing "bad money from driving out good." **Strengthening institutional responsibility:** Requiring banks, payment institutions, securities firms, internet platforms, and other institutions to strengthen due diligence, cutting off the funding, advertising, and technical support channels for illegal activities. This increases the operating costs and risks of illegal activities. Educating the public and raising awareness: By alerting the public to risks through authoritative channels, it helps reduce irrational speculative sentiment and cultivate rational investment concepts. For institutions and projects that consistently pursue compliant operations, this policy signal may lead to market caution in the short term, but in the medium to long term, it is actually beneficial: First, the clarity of regulation reduces the uncertainty of the "gray area," and the rules for compliant operation are more explicit; second, the purification of the market environment helps compliant projects gain more rational market attention and resource allocation; third, the emphasis on "risk" and "non-approval" rather than "absolute prohibition" leaves a policy interface for conducting compliance pilot programs in the future when conditions are ripe and rules are clear. V. Rational Considerations Under a Resolute Stance: Differentiated Treatment and Risk-Based Approach Looking at the actions of the thirteen ministries and seven associations, what they demonstrate is a resolute attitude, but also rational thinking—a form of regulatory wisdom. The firm stance is reflected in: a "zero-tolerance" attitude towards any form of illegal financial activity, resolutely safeguarding national financial security and social stability; explicitly prohibiting and severely cracking down on any attempt to circumvent the existing legal framework to conduct illegal issuance, trading, or provide related services within the country; and promptly addressing current market speculation hotspots and managing risks. Rational thinking is reflected in the following ways: Differential treatment: Different types of virtual currency-related concepts are addressed by prohibiting activities with obvious fraudulent attributes, such as "air coins" (cryptocurrencies with no real value), while for stablecoins and RWA, the focus is on highlighting their inherent risks and current regulatory status; Risk-based approach: Regulatory measures focus on the illegality and substantial risks of specific behaviors, rather than a blanket rejection of the technology or concept; Allowing for flexibility. While emphasizing "unapproved" and risks, the document does not close off the possibility of future compliant exploration under the premise of improving rules and controlling risks. This rationality stems from a deep understanding of the complex relationship between financial innovation and risk control. Blockchain technology and asset tokenization have their potential value, but they must develop in an orderly manner within an effective legal and regulatory framework. The current regulatory stance is a prudent balance that prioritizes the prevention of current risks while reserving space for future compliant development. In summary, the "Risk Warning" issued by the 13 ministries and commissions and the seven associations lists RWA and stablecoins as areas of risk concern, but does not simply equate them with illegal activities such as worthless cryptocurrencies or prohibit them outright. The core of the document is to combat all kinds of illegal financial activities and their supporting industrial chains carried out within the country, aiming to draw a clear line, purify the market, and protect investors. For market participants, the key is not fear of concepts, but respect for the law and risk. Any exploration involving RWA or stablecoins must prioritize compliance, strictly adhering to domestic and international laws and regulations, especially prohibiting illegal issuance, trading, and provision of services within China. Conducting compliant and prudent exploration within the existing legal framework, particularly in jurisdictions like Hong Kong with established rules, remains a viable path. This regulatory statement, in the short term, serves as a warning and a "cleaner" for the chaotic situation; in the long term, it may be a "signal" and a "cornerstone" for the industry's standardized development. It conveys a clear message: while upholding the bottom line of safety, Chinese financial regulators maintain a rational observation and assessment of cutting-edge technologies. This combination of attitude and rationality may be the regulatory norm that emerging fintech sectors must understand and adapt to for long-term development in the Chinese market. The opportunities of the future will undoubtedly belong to those true builders who can both embrace technological innovation and deeply understand and uphold the spirit of compliance.