Seven major associations in China jointly issued: Preventing risks involving illegal activities such

On December 5, 2025, seven major financial industry associations including the Internet Finance Association of China jointly issued \"Risk Tips on Preventing Illegal Activities Related to Virtual Currency\". The release of this document attracted widespread attention because it not only pointed out the potential risks of virtual currency and related businesses in unprecedented clear terms, but also imposed a comprehensive ban on all domestic activities involving virtual currency transactions and emerging \"real-world asset token\" businesses. This statement provides a clear regulatory framework for the China market and further strengthens preventive measures against illegal financial activities. Industry insiders generally believe that this move will profoundly affect the development direction of the domestic crypto market, especially those innovative projects that rely on virtual currency and face more stringent compliance challenges.

This is not an isolated industry warning. Just a week ago, the People\'s Bank of China just took the lead in convening the \"Coordination Mechanism Meeting on Combating Virtual Currency Trading hype\" with the participation of 13 departments. For the first time, it was clear at the official level that \"stablecoins are a form of virtual currency.\"

Industry insiders generally believe that from the institutional deployment of central ministries and commissions to the simultaneous implementation of the seven major industry associations, it marks that China\'s supervision of virtual currency has transitioned from special governance to a new stage of normalized and synthetic operations. The regulatory network is tightening with unprecedented density and intensity.

This supervision has three core goals:

First, completely clarify the illegal financial nature of virtual currencies and their variants;

The second is to order all licensed financial institutions and Internet platforms to completely cut off any service connections with the virtual currency industry;

The third is to issue the most severe risk warning to the public amid the global wave of digital asset concepts. Behind this lies the deep national financial security logic of safeguarding monetary sovereignty, ensuring the stability of the financial system, and safeguarding the capital account management system.

1. Regulatory upgrade: From \"banning activities\" to \"cutting off services\"

The core of this joint reminder of the seven associations is to extend the regulatory firepower from focusing on virtual currency transactions itself to the entire financial and technical services ecosystem that supports their operations. The document proposes highly targeted bans on various market participants.

● First of all, various financial institutions are required to serve as a \"separation wall.\" Banks and payment institutions are strictly prohibited from providing any account, clearing, settlement or credit services for the issuance and trading of virtual currency or real-world asset tokens, and they are also clearly not allowed to provide any financial support for \"mining\" activities. Investment institutions such as securities, funds, and futures are required not to get involved in related financial products and services. This means that the channel through which virtual currency attempts to exchange legal currency and transfer funds through the traditional financial system has been substantively welded.

● Secondly, marketing and technical services by Internet platform companies are strictly prohibited. The document clearly requires that the platform shall not provide marketing publicity, information release or technical support for related illegal activities. This will greatly reduce the online dissemination space of virtual currency projects within the country and combat their development model of using social platforms to divert and operate communities.

● What is particularly critical is that regulatory responsibilities are consolidated into the institutions themselves. The document requires banks and payment institutions to strictly carry out customer due diligence, proactively judge and report suspicious clues. This establishes the proactive monitoring and reporting obligations of financial institutions and puts the anti-money laundering and anti-fraud defense line forward. If any organization still provides services \"knowing or should know\", its domestic staff and the organization itself will be held accountable in accordance with the law.

2. Extension of focus: RWA is explicitly prohibited for the first time.

Unlike previous risk warnings, a prominent new highlight of this joint statement is the inclusion of \"real-world asset tokenization\" for the first time.

● Real-world asset tokenization usually refers to the conversion of the rights of real assets such as real estate, art, bonds, and private equity into digital tokens through blockchain technology for financing and trading. In recent years, as Hong Kong and other places have explored asset tokenization \"sandbox\" projects, this concept has also attracted attention in China. Some companies have tried to explore the \"domestic assets + overseas issuance\" model.

● This time, the Seventh Association pointed out its inherent risks, including false asset risks, business failure risks and speculation risks, and resolutely announced: \"my country\'s financial management department has not approved any real-world asset tokenization activities.\" The document further clarifies that no matter whether issuance and financing occur within or outside the country, as long as services are provided to domestic residents, it is illegal financial activities.

● This move completely blocked the loopholes in the illegal raising of funds and issuing securities without authorization in the name of \"financial technology innovation.\" The analysis pointed out that this reflects the supervisory level\'s penetrating supervision concept of \"substance over form\" of financial activities. Any attempt to divide, tokenize and publicly finance traditional financial assets is prohibited as long as it is not authorized.

3. Clarify the nature: Reiterating that virtual currencies have no monetary attributes, analyze the real risks of \"stablecoins\"

While expanding the regulatory boundaries, the document also clearly defines the nature of various types of virtual currencies, especially the \"stablecoins\" that have attracted much attention recently.

● The document reiterates that all virtual currencies, including Bitcoin, are not issued by monetary authorities, are not legal tender, have no legal compensation, and cannot be circulated as currency in the market. For \"air coins\"(such as π coins) that use technical gimmicks, the document directly exposes their nature of no substantial innovation, no application scenarios, and serious fraud and manipulation problems.

● For stablecoins that some market participants have \"compliance illusions\", the document quoted the spirit of the central bank meeting and clearly pointed out that they \"are a form of virtual currency.\" The risk warning details the three major risks of stablecoins: it cannot effectively meet customer identification and anti-money laundering requirements, and there is a huge risk of being used for illegal activities such as money laundering, fund-raising fraud, and illegal cross-border transfer of funds.

● This characterization completely breaks the speculation that stablecoins may become a \"special case\". Legal experts pointed out that behind this is the country\'s firm defense of the three major security lines of currency sovereignty, capital account management and anti-money laundering.

The anonymous, cross-border, and free-flowing characteristics of stablecoins (especially mainstream U.S. dollar stablecoins) may essentially form a \"parallel monetary system\" and fund transfer channel outside supervision, posing a direct challenge to the country\'s financial sovereignty and foreign exchange management.

4. Defending Financial Sovereignty and Responding to the Global Digital Financial Game

This comprehensive upgrade of supervision not only stems from the urgent need for domestic risk prevention and control, but also lies on the global digital financial competition and the evolution of the international monetary system.

● From an international perspective, the dollar-dominated stablecoin is expanding at an unprecedented rate. Some studies have pointed out that the United States \'support for cryptocurrencies is opening up a \"new dollar cycle\", making it a supplement to the \"digital dollar liquidity\" of traditional financial markets. This is essentially an extension and consolidation of dollar hegemony in the digital era.

The United States is trying to strengthen its international monetary status with the help of the dollar stablecoin. In this context, if stablecoins with U.S. dollars as reserves are allowed to freely circulate and use within the country, it is tantamount to opening the door for the penetration of \"digital dollars.\"

● China\'s response strategy is clear and firm: on the one hand, it adopts a \"zero-tolerance\" ban attitude towards any private digital token that may erode currency sovereignty, interfere with capital controls, and become illegal cross-border capital channels; on the other hand, accelerate the development and application of digital RMB, a legal digital currency endorsed by national credit.

Recently, Shanghai has established measures such as the Digital RMB International Operation Center, aiming to optimize cross-border payments through a secure and controllable official digital currency system, and actively participate in and shape the future global digital payment landscape.

This strategy of \"combining congestion removal and congestion removal\" reflects the forward-looking nature of top-level design. Blocking is to prevent financial risks and disorderly impact of international capital; loosening is to seize the initiative in the future currency form and open up a new path for RMB internationalization in the digital era.

5. Data security protects the \"money bag\"

Faced with the concept and skills of continuous renovation, the Seventh Association issued a strong appeal to the public in the reminder: Effectively enhance risk awareness and protect your own \"money bag\".

● The document reminds the public that the price of virtual currency fluctuates violently and is often used for speculation and pyramid scheme fraud. The public should be wary of any \"historical gain\" displays, buying and selling suggestions or speculative prospects publicity about virtual currencies or RWA tokens, and refuse to click on links and QR codes on overseas trading platforms. Once relevant clues are discovered, they should promptly report them to the regulatory authorities or to the public security organs.

● For ordinary investors, this means that they must completely abandon the mentality of luck. In China, any organization or individual engaging in services such as the issuance, trading, exchange of virtual currency, and providing information intermediaries for transactions are illegal financial activities and will bear the losses caused thereby. Even if transactions are conducted through overseas platforms, domestic facilitators and service providers will face legal accountability.

6. The era of normalized supervision has begun, and the logic of compliance survival has been reconstructed

● The joint \"sword\" of the seven major financial industry associations, echoed the work coordination mechanism meeting led by the central bank, and jointly announced the arrival of a new era of virtual currency supervision in China. This is no longer a sports-style rectification, but a tight protective network based on a normalized mechanism, multi-department combined operations, and covering the entire chain of capital flow and information flow.

● The signal it sends is extremely clear: In the mainland of China, any commercialization and financialization of virtual currencies and their various variants (including stablecoins, RWA tokens, etc.) has been completely blocked. Any market participant, whether an institution or an individual, must completely abandon the illusion of seeking arbitrage in a \"grey area.\"

In the future, relevant supervision will only become more refined and in-depth.

For financial institutions and technology companies, the logic of survival and development must be based on absolute separation from virtual currency business and proactive performance of risk monitoring responsibilities.

For countries, while building a strong financial security line, how to use underlying technologies such as blockchain to empower the real economy, and how to actively participate in and lead the global financial system through innovative tools such as digital RMB. Digital transformation will be a more important long-term issue.

This regulatory storm is not only a strong purification of the domestic financial order, but also a firm oath to China\'s financial sovereignty and development path in the turbulent international financial competition.