Virtual Currency, Regulatory Reinforcement

On February 6th, the People's Bank of China, the Financial Regulatory Authority, the China Securities Regulatory Commission, and six other departments jointly issued the "Notice on Further Preventing and Managing Risks Related to Virtual Currencies and Other Activities" (hereinafter referred to as the "Notice"). The Notice reiterates that virtual currencies do not have the same legal status as fiat currency, continuing the policy of prohibition against virtual currencies. It also clarifies policy requirements for stablecoins pegged to fiat currency and tokenized real-world assets (RWA).

Activities involving RWA tokenization are prohibited within the country. Various trading platforms are not allowed to participate in RWA token issuance and trading within the country, nor can they directly or indirectly provide related services to clients for RWA tokenization activities domestically. For example, internet companies are prohibited from offering online venues, commercial displays, marketing, paid traffic, and other services for RWA tokenization.

Domestic entities engaging in RWA tokenization abroad through foreign debt or conducting asset-backed securitization or equity-like RWA tokenization based on domestic asset ownership or income rights (hereinafter collectively referred to as "domestic rights") outside the country must adhere to the principle of "same business, same risk, same rules." The relevant departments, including the National Development and Reform Commission, the China Securities Regulatory Commission, and the State Administration of Foreign Exchange, will conduct strict supervision according to their responsibilities and in accordance with laws and regulations. No organization or individual may carry out the above activities without approval or filing with the relevant authorities.