On February 6, 2026, multiple ministries jointly issued a new notice regarding cryptocurrencies, namely (Yinfa [2026] No. 42) Notice on Further Preventing and Handling Risks Related to Virtual Currencies, issued by the People's Bank of China, 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 State Financial Regulatory Commission, the China Securities Regulatory Commission, and the State Administration of Foreign Exchange. This notice is a comprehensive definition based on the notice issued on September 24, 2021, and some meetings held by relevant departments at the end of last year. This article is an interpretation of some personal views on this notice.
Interpretation of the section "Clarifying the Essential Attributes of Virtual Currencies, Tokenization of Real-World Assets, and Related Business Activities"The first article defines virtual currencies as not having the attributes of legal tender. Although they have the name "currency," they cannot be defined as legal tender and cannot circulate as currency.
The first article defines virtual currencies as not having the attributes of legal tender. Although they have the name "currency," they cannot be defined as legal tender and cannot circulate as currency.
Furthermore, it emphasizes that all businesses related to cryptocurrencies are defined as "illegal financial activities." Within mainland China (excluding Hong Kong), the following activities are prohibited: "conducting legal tender and virtual currency exchange business (i.e., OTC, commonly known as "deposits and withdrawals")," "providing information intermediary and pricing services for virtual currency transactions" (i.e., trading brokerage services), and "token issuance financing and trading of virtual currency-related financial products (i.e., ICOs and other financial services related to virtual currencies, such as staking)." Additionally, overseas institutions and individuals are prohibited from illegally providing virtual currency-related services to domestic entities in any form (specifically targeting overseas cryptocurrency exchanges). This content originates from the "924" notice. Building upon it, the first point adds a discussion on stablecoins, stating that stablecoins pegged to fiat currencies effectively fulfill some of the functions of fiat currencies in circulation, objectively acknowledging that stablecoins possess some fiat currency functions due to their peg (impacting subsequent cross-border trade). It also stipulates that no one, domestic or foreign, may issue RMB stablecoins without the consent of relevant departments (clarifying the previous issue of issuing offshore RMB stablecoins, requiring compliant approval, indicating that the issuance window for offshore RMB stablecoins will remain open as needed). The second point addresses Real-World Asset Tokenization (RWA). RWA became a hot topic last year, but its management has remained relatively vague and uncertain. This notice clarifies the definition of RWA and also specifies that any RWA product issued within China is prohibited from intermediary supply chains unless approved and based on specific financial infrastructure (consortium blockchain/digital RMB). Furthermore, it prohibits foreign institutions and individuals from illegally participating in RWA projects for domestic entities.
Improving the Working Mechanism
Articles 3 and 4 should be considered comprehensively, with Article 4 being particularly noteworthy: "Strengthening local implementation. Each provincial-level people's government shall be responsible for the overall prevention and handling of risks related to virtual currencies and the tokenization of real-world assets within its administrative region. Specifically, this shall be led by local financial management departments, with the participation of branches and agencies of the State Council's financial management departments, as well as telecommunications authorities, public security departments, market supervision departments, and other relevant departments. This shall be coordinated with the cyberspace administration, people's courts, and people's procuratorates to establish a sound and normalized working mechanism, effectively connecting with the relevant working mechanisms of central departments, forming a collaborative working pattern between central and local governments and combining vertical and horizontal approaches, actively preventing and properly handling risks related to virtual currencies and the tokenization of real-world assets, and maintaining economic and financial order and social stability." This clarifies the division of responsibilities among local governments and departments and emphasizes that local financial departments need to assist other departments in learning and understanding blockchain technology. This fills the legal loopholes in previous jurisdictional management.
Article 5 mainly focuses on risk control supervision, while Article 6 is particularly noteworthy. The full text is as follows: "Financial institutions (including non-bank payment institutions) shall not provide account opening, fund transfer, and clearing and settlement services for virtual currency-related business activities; shall not issue or sell virtual currency-related financial products; shall not include virtual currencies and related financial products in the scope of collateral; and shall not conduct insurance business related to virtual currencies or include virtual currencies in the scope of insurance liability. They shall also strengthen risk monitoring and promptly report any clues of illegal or irregular activities to relevant departments. Financial institutions (including non-bank payment institutions) shall not provide custody, clearing and settlement services for unauthorized real-world asset tokenization-related businesses and related financial products. Relevant intermediary institutions and information technology service institutions shall not provide intermediary, technical, or other services for unauthorized real-world asset tokenization-related businesses and related financial products." The phrase "including non-bank payment institutions" further expands the scope, imposing restrictions on internet companies and preventing loopholes. The prohibition against issuing and selling virtual currency-related financial products also bans domestic platforms from selling over-the-counter ETFs containing BTC or ETH (meaning domestic public and private QDII funds cannot purchase these ETFs). The prohibition against including virtual currencies and related financial products in the scope of collateral prohibits crypto staking to avoid de-pegging issues. The prohibition against conducting insurance business related to virtual currencies or including virtual currencies in insurance coverage means that cryptocurrency-related insurance cannot be provided (due to contractual issues and the high risk of liquidation, domestic institutions are not allowed to provide such insurance). Following the virtual currency issue, financial institutions are also restricted from providing services for unapproved tokenization of real-world assets. Articles 7 and 8 primarily address compliance requirements for domestic media and internet companies, prohibiting them from arbitrarily promoting businesses related to virtual currencies and the tokenization of real-world assets (blockchain technology itself is permissible, and similarly, digital collectibles are also allowed). Furthermore, advertising using terms such as "virtual currency," "virtual asset," "cryptocurrency," "crypto asset," "stablecoin," "real-world asset tokenization," and "RWA" will be subject to regulatory restrictions to prevent misleading information. Article 9 addresses the issue of "mining" and clarifies recent developments regarding mining. It mandates a comprehensive review and shutdown of existing virtual currency "mining" projects, a strict ban on new "mining" projects, and a prohibition on "mining machine" manufacturers providing "mining machine" sales and other services within the country. This means that the compliance requirements for mining machine companies' sales are higher (domestic production of mining machines is compliant, but they can only be sold overseas and cannot be associated with domestic operations). Articles 10 to 12 mainly target criminal and industry association requirements, primarily strengthening law enforcement and supervision, and clarifying risk disposal mechanisms. Article 13 mainly targets ICOs; without permission (approval is required), domestic entities and their controlled overseas entities are prohibited from issuing virtual currencies overseas (for projects with financing and token issuance needs, even if they use circumvention structures, they are still within the scope of official supervision). Article 14 clarifies the tokenization of real-world assets, including foreign debt (direct issuance of digital bonds) or domestic equity (collateral) and equity (non-listed equity STO). It is jointly regulated by multiple departments; the overseas issuance of domestic equity requires filing with the China Securities Regulatory Commission (CSRC). Article 15 addresses the requirement that overseas subsidiaries of domestic financial institutions can conduct RWA business overseas, but they must ensure compliance (access, risk control, anti-money laundering) and accept the domestic regulatory system. Related service institutions issuing RWAs overseas for domestic interests must implement internal controls and obtain relevant departmental approvals. Articles 16 and 17 primarily emphasize avoiding financial risks, strengthening financial education on virtual currencies and RWAs, and enhancing understanding and awareness of blockchain finance. Article 18 primarily addresses the issue of "domestic entities and individuals who knowingly or should have known that foreign entities illegally provide virtual currency or real-world asset tokenization services to domestic entities, and still provide assistance, shall be held accountable according to law; if a crime is constituted, criminal liability shall be pursued according to law." This is indeed a key point worth noting, as relevant practitioners need to pay attention to compliance awareness to avoid encountering criminal liability. Article 19 states that "Any unit or individual investing in virtual currencies, real-world asset tokens, and related financial products in violation of public order and good morals shall have their related civil legal acts invalid, and any losses arising therefrom shall be borne by the individual; if such actions are suspected of disrupting financial order or endangering financial security, the relevant departments shall investigate and deal with them according to law." This clarifies the previously debated understanding of civil issues related to cryptocurrencies. If problems arise from unit or individual investments in cryptocurrencies (such as lending, investment liquidation, collateralization, mining agreements, deposits and withdrawals, etc.), it is defined as an invalid civil legal act that violates public order and good morals, and any losses incurred shall be borne by the individual, without court protection. This clarifies the attribution of responsibility and the court's adjudication standards. In summary, this notice clarifies the scope, is a refinement of the 924 notice, and responds to the spirit of the meeting held earlier this year by multiple ministries to further refine, legalize, and clarify the content related to cryptocurrencies and RWA. The biggest highlight of this notice is that it separates and regulates virtual currencies (including stablecoins) from the tokenization of real-world assets. Regarding virtual currencies, it continues to build upon the September 24th notice, with the biggest highlight being the further clarification of their nature in civil trials. It also includes stablecoins within the scope of virtual currencies while retaining room for further detailed regulation, and affirms their property attributes. As for the tokenization of real-world assets, it incorporates them into the scope of traditional financial regulation through the discussion of tokens, separating them from virtual currencies. Further details regarding registration and regulation will be provided in more detailed notices from various departments.
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