<div id="readability-page-1"><div><div>On February 6, 2026, the People's Bank of China and eight other ministries issued the &#34;Notice on Further Preventing and Handling Risks Related to Virtual Currencies&#34; (Yinfa [2026] No. 42, hereinafter referred to as &#34;Document No. 42&#34;). Document No. 42 generally continues the strict &#34;one-size-fits-all&#34; regulatory attitude of mainland China towards virtual currencies. Regarding stablecoins, Document No. 42 doesn't elaborate much, but based on the regulatory principle of &#34;dynamic assessment,&#34; it leaves room for their permitted operation. More importantly, Document No. 42, for the first time, includes Real-World Asset Tokenization (RWA) within its regulatory scope. Meanwhile, the China Securities Regulatory Commission (CSRC) also issued a &#34;Regulatory Guidelines on the Issuance of Asset-Backed Securities Tokens Overseas by Domestic Assets&#34; (hereinafter referred to as the &#34;Guidelines&#34;). These Guidelines, along with the regulatory requirements for real-world asset tokenization (RWA) business in Document No. 42, provide a framework for the previously gray-area RWA business. Document No. 42 brings all three types of virtual assets/digital assets—cryptocurrencies, stablecoins, and real-world asset tokens—under regulation, filling previous regulatory gaps and representing the most precise and complete legal framework for virtual asset-related businesses in mainland China. Thus, China's virtual asset regulatory framework has been initially established.<img src="https://imageproxy.pbkrs.com/https://img.jinse.com.cn/4001899_image3.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="300" height="145" original-src="https://imageproxy.pbkrs.com/https://img.jinse.com.cn/4001899_image3.png"/><h2>I. Historical Evolution of Virtual Asset Regulation in Mainland China</h2>The &#34;94 Announcement&#34; (Announcement on Preventing Risks of Token Issuance Financing) of September 4, 2017, identified Token Issuance Financing (ICO) as essentially an unapproved and illegal public financing<img src="https://imageproxy.pbkrs.com/https://img.jinse.com.cn/4001899_image3.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="300" height="145" original-src="https://imageproxy.pbkrs.com/https://img.jinse.com.cn/4001899_image3.png"/><h2>II. Interpretation of the Core Clauses of Document No. 42</h2> 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, State Financial Regulatory Commission, China Securities Regulatory Commission, and State Administration of Foreign Exchange on Further Preventing and Handling Risks Related to Virtual Currency (Yinfa [2026] No. 42)<img src="https://imageproxy.pbkrs.com/https://img.jinse.com.cn/4001899_image3.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="300" height="145" original-src="https://imageproxy.pbkrs.com/https://img.jinse.com.cn/4001899_image3.png"/><h2>III. China has initially established a regulatory framework for virtual assets</h2>China's regulatory attitude towards virtual currencies has remained unchanged, but this time, Document No. 42 is not just a reiteration of the strict attitude towards virtual currencies.China's regulatory attitude towards virtual currencies has remained unchanged, but this time, Document No. 42 is not just a reiteration of the strict attitude towards virtual currencies. Document No. 42 differentiates between three important forms of virtual/digital assets: from a &#34;one-size-fits-all&#34; approach to virtual currencies, to &#34;dynamic evaluation&#34; of stablecoins, and then to the positive shift towards &#34;permissioned business&#34; for tokenized real-world assets (RWA), this represents a progressive regulatory approach. It also signifies that China will promote the development of virtual/digital assets from the virtual to the real economy. The image above shows the categories of virtual/digital assets that I have been sharing, and Document No. 42's differentiated regulation serves as further confirmation of this. Thus, China has initially established a regulatory framework for virtual/digital assets, with more detailed rules to be improved. However, the core red lines remain: It is strictly prohibited to conduct business within the country, or to conduct business within the country. It is strictly prohibited to use virtual currencies (stablecoins) to perform the functions of fiat currency. Looking back at Dr. Xiao Feng's proposal from Hashkey to &#34;start from the origin and look at the first principles of blockchain,&#34; its underlying logic remains clear: Blockchain is becoming a new globally unified ledger and the infrastructure of new finance; Tokenized money built on this ledger will level the efficiency and cost of global value transfer; thus, a global, 24/7, multi-asset market for payments, lending, and capital finance is being constructed. China's nascent virtual/digital asset framework will fully leverage the advantages of blockchain and tokenization, injecting more innovative vitality into the real economy and traditional finance.</div></div></div>

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On February 6, 2026, China's People's Bank and eight ministries issued Document No. 42, establishing a regulatory framework for virtual assets. This document maintains a strict regulatory stance on virtual currencies while allowing for dynamic assessment of stablecoins. Notably, it includes Real-World Asset Tokenization (RWA) under regulation, marking a significant shift. The China Securities Regulatory Commission also released guidelines for asset-backed securities tokens. Overall, Document No. 42 fills regulatory gaps and represents a comprehensive legal framework for cryptocurrencies, stablecoins, and RWA in China, promoting the integration of virtual assets into the real economy.

- On February 6, 2026, the People's Bank of China issued Document No. 42, focusing on regulating virtual currencies, maintaining a strict regulatory stance while allowing for some dynamic assessment of stablecoins.  
- This document includes Real-World Asset Tokenization (RWA) under its regulatory framework, providing clarity and filling gaps in the previously ambiguous regulatory environment for virtual assets.  
- Together with guidelines from the China Securities Regulatory Commission, Document No. 42 marks the initial establishment of a comprehensive legal framework for cryptocurrencies, stablecoins, and tokenized assets in mainland China.

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Beyond RWA: With the implementation of Document No. 42, China's regulatory framework for virtual assets is taking initial shape.