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AI Track Regains Momentum, Thoroughly Reviewing Potential Projects and Market Hype Logic
In October 2024, since the launch of the AI Meme——GOAT, the AI Agent concept, Crypto has begun to accelerate its integration with AI. Concepts such as Game+AI, DeFAI, AI Agent Hive, etc., have emerged, with almost a batch of new concept projects appearing every week, until January 18th of this year when Trump announced the issuance of MemeCoin, directly draining market liquidity, causing the premature bursting of the CryptoAI bubble. Then, 2 days later, DeepSeek announced the open-source R1 model, and after a few weeks of fermentation, the AI concept stocks in the US stock market also saw their bubble burst.
According to CoinMarketCap data, the total market value of AI projects has now returned to levels around the time of Trump's coin issuance. The Virtuals ecosystem has risen by 120% in the past 7 days, ai16z has risen by 115% in the past 7 days, and other projects such as Arc, GRIFFAIN, COOKIE have also seen increases of over 60%.
One quarter later, the CryptoAI frenzy has returned to the market.
What is the Market Playing At?
According to Cookie's data, the top three on the Mindshare list in recent days are FARTCOIN "15.14%", VIRTUAL "10.08%", and ZEREBRO "4.74%". And in terms of market trading volume, FARTCOIN, VIRTUAL, and ZEREBRO are also at the forefront.
Despite the lack of a TG/Discord community, project information, or founder, FARTCOIN remains strong. As a model of capital-driven culture, it leads the overall AI market with an early start. In just two weeks, it pushed its market cap from over 300 million to 1.1 billion USD, and the recent upward trend has forced many market makers to buy small amounts of spot on the market, forming a sustained upward range.
Virtuals continue to Build in a bear market, preparing multiple updates. In this moment when the AI market is warming up, they threw everything they had prepared at the market at a high frequency. In just one week, the token price more than tripled, sparking a strong market response.
Meanwhile, ZEREBRO has recently hinted at a collaboration with the well-known rapper Ye "Kanye West" and changed the name on social media X to a possible name for Ye's next album "WW3." Subsequently, they released a "portrait" of Ye, and according to a community member investigation, this photo had not previously appeared on the internet, proving that the two parties did indeed have contact offline.
Moreover, in a social media post, a new token called Crashout was introduced. This token features a well-known "meme" image of rapper Travis Scott lifting a microphone stand during a performance as its logo, reaching a peak market cap of 2 million USD. Additionally, a few months ago, OPAIUM DAO, initiated by ZEREBRO founder JEFF YU, saw its namesake token OPAIUM unexpectedly surge to a 10 million USD market cap, surpassing its previous peak of 50 million USD.
Note: Previously, ZEREBRO, as a musician, released multiple albums on platforms like Spotify, receiving strong market feedback. The music was perceived to resemble that of a seasoned rapper rather than AI-generated.
On Cookie's showcased MindShare list, the fourth and fifth positions are held by two new projects, THeoriq and MIRRA, respectively.
THeoriq
Theoriq is a modular, composable AI agent base layer with purportedly strong capabilities, including machine learning, multi-agent swarm collaboration, and the concept of DeFAI. It encompasses nearly all currently trending concepts, and regardless of how many "forerunners" have already attempted to achieve these, it inevitably leads one to wonder, "What sets it apart from other AIs?"
However, any degree of completeness in such endeavors tends to cause a stir in the market. Theoriq is indeed among the "righteous ones," with founder and CEO Ron Bodkin previously serving as Vice President and CIO of Artificial Intelligence Engineering at Vector Institute, leading collaborative innovation projects with Google's AI research team and external teams, and founding Think Big Analytics, which was later acquired by the prominent software data company Teradata, along with several successful IPO-bound startups.
The illustrious track record of the founding team has attracted top-tier VC teams such as Hack VC, Foresight Ventures, IOSG Ventures, and Alliance DAO, all vying to participate.
MIRRA
Mirra is a decentralized AI model trained on selected data. Currently, Mirra has two participation modes. Users can become a Creator, a content creator who simply needs to continuously share content on X. This mode is similar in logic to Kaito but more freeform and purposeless. The second mode is Scout, where users tag Mirra under high-quality content to learn. If the content is deemed valuable for learning, users can receive NLP. The profit model of Mirra is currently unclear, with potentially multiple adoptable models. One possible model is to integrate into other tools that require market sentiment or judgment, such as DEFAI.
The Transformation of the AI LaunchPad Landscape
Following Pumpfun's success, the crypto space experienced a wave of asset launch platforms. During the previous AI Agent trend, frameworks and AI distribution networks/LaunchPads were the two areas with the highest FDV. As the concept of developer community frameworks, similar to Ai16z, developed to a certain extent, the community realized the limitations of what frameworks could achieve, especially in capturing value in the crypto space. Therefore, the surviving frameworks gradually transitioned into LaunchPads.
However, AI LaunchPads did not fare well either, as the existing LaunchPads at the time could not meet the needs of AI product launches. To prepare for the return of the next AI hype wave, project teams began seeking solutions.
The CryptoAI Infrastructure Oasis—Bittensor
Despite experiencing a situation where the SN28 subnet was exploited to turn it into a MemeCoin, driving the TAO release into the Meme Coin frenzy, and ultimately being intervened by centralized foundation control, over time, the foundation's control over the Bittensor subnet will diminish. This has raised concerns in the community about its future potential transformation into an "attention network" incentive project. A long-time observer of the Bittensor project, known for unconventional thinking, also published an article stating that it may be a scam.
Further reading: "Opinion: Why Bittensor Is a Scam, Is TAO Heading to Zero?"
However, purely from an investment perspective, Bittensor's ecosystem liquidity is better than that of other AI Agent ecosystems. For example, Virtuals, because LP is paired with Virtuals, this leads to higher volatility for liquidity providers. Investors may experience a slippage of approximately 3% to 7% when investing in agent tokens within the platform. Whereas, when funds are invested in the dTAO subnet token, the slippage is usually between 0.05% to 0.1%.
It is for this reason that VC or large fund AI project participants tend to lean towards making long-term investments in Bittensor. Just last week, former Messari analyst and Crucible Labs partner Sami Kassab announced that he and his friend with similar work experience, Seth Bloomberg, will establish a fund specifically to provide liquidity for Bittensor.
The current "first-party" of Bittensor, Rayon Labs, has developed several products that offer insights into the preferences of Bittensor's project parties, who tend to be more "practical" and long-term oriented.
SN64 "Chutes" offers a serverless way to easily deploy AI infrastructure. The project team stated that a previous AWS outage event is the best example of why we need "serverless." Depending on centralized service providers, if there is an outage, AI applications may crash due to a single point of failure. As the Crypto industry is closely related to finance, the likelihood of losses is much higher than traditional AI.
SN56 "Gradients" is a platform for zero-code deployment of AI models. Users can train their AI models on Gradients (for specific use cases, image generation, custom LLM), and the recently launched v3 is more cost-effective compared to similar products.
SN19 "Nineteen" is a fast, scalable, decentralized artificial intelligence reasoning platform.
Creator of the AI Agent Protocol — Virtuals Protocol
As one of the most comprehensive AI projects that combined ecosystem building with the value flywheel in the previous cycle, Virtuals Protocol saw its token price slow down as the market quieted, followed by the bursting of a $45 billion market cap bubble, with a drop of over 90%, and a significant decrease in transmitter participants. However, Virtuals did not give up. In this AI bear market, they began to Build, and now Virtuals' market cap has returned to the $10 billion mark.
Firstly, Virtuals has enhanced its project by building an ecosystem and has launched the VPN Plan (Virtuals Partners Network). From the beginning, Virtuals' plan has been to introduce more AI people into Crypto, and this plan will interconnect multiple ecosystem positions, including investors, experts from various fields, scholars, and developers. Essentially, as long as you have an idea, whether you are an investor, liquidity provider, marketer, or even a professional, you can obtain resources from this plan. It is an "all-in-one" incubator service, making collaboration with Virtuals the best choice for anyone looking to enter the Crypto space.
To expand the influence and interactivity of AI Agents in the ecosystem, Virtuals has designed a protocol called ACP (Agent Commerce Protocol). It can be seen as a concrete version of the previous concepts of Swarm, Ai16z, and other projects, where ACP constructs a business ecosystem composed of AI agents. For AI Agents, this is a virtual nation where they can interact autonomously, collaborate, and transact with each other. Furthermore, it is worth mentioning that Google later released a similar concept called A2A. The main difference is that ACP is interconnected by smart contracts, while A2A is connected by protocols.
In April, Virtuals introduced a new model for Virgen points and the Genesis launch mode. Users can earn points by investing in Sentient and Prototype Agents, holding Virtuals, staking VADER, and other means. These points are the foundation for participating in the Genesis Launchpad project. The Genesis Launchpad is an IDO-style project launch mechanism where users receive investment quotas based on the points they hold. This launch mode is currently not open to everyone but requires official approval from Virtuals.
This model has several benefits. Firstly, it increases user retention on the platform through rewards. In the words of the founder, Ethermage, "Our principle is to reward believoors." Staking points to obtain participation in the Genesis project allocation makes the launch more equitable, and participants are usually of higher quality, allowing the project to develop more sustainably.
Hackathon Project
In addition to projects of note on Genesis, Virtuals just announced the winners of this hackathon on April 21, with over 100 project teams participating. The judging panel was also quite impressive, including Luca Curran, in charge of AI and DEPIN development at Base, Kun Peng, founder of the Stanford Blockchain Community, and Anand Iyer, a partner at Canonical Crypto. Anand Iyer's interestingly enough has the AI tag on X.
The Intern is an AI assistant for operations that can help with promotion, responses, and community management on X. Through in-depth community learning, he can understand the community's culture and can use TADA to generate images. He has now partnered with Pudgypenguins to launch the Penguin Intern and is running his own Twitter account. Judging by the quality of Twitter operations, if it were entirely AI-operated independently and could be scaled to this level, it would be a promising product.
BuzzingClub is a prediction market platform where the project team believes the future of prediction markets should be in the hands of participants, not a central authority. "Everyone should be able to freely create, share, and express their opinions," so Buzzing is more free compared to other prediction platforms.
In Buzzing, all users can create prediction markets by proposing topics or questions, with AI generating rules. The AI algorithm then filters out some spam and low-quality prediction markets, and finally, an AI oracle automatically retrieves internet search data instead of manual data to determine the outcome of prediction questions.
Burnie is a code learning platform that can enhance the overall skills of users who want to learn to code, and players can earn rewards by completing the tasks he releases.
Inspiration is an App, Post-AI Application Era Market Layout
Arc and Ai16z, after the framework development gradually stagnated, have also transformed into AI Agent distribution platforms. After the launch of Arc's distribution platform, forge, it disappeared from sight since the first product, AskJimmy. Ai16z's AutoFun went online a few days ago, but the currently publicly supported projects have not yet launched, and the development remains unclear. From a product framework perspective, AutoFun seems to lean more towards creating a community UGC cultural platform, and in terms of value retention, it is not much different from traditional LaunchPads.
Arc plans to launch the new Agentic App Store Ryzome, while Myshell's AIApp Store already exists. The former has not yet officially launched, and the latter lacks activity, with most of the products appearing to be very similar.
In this scenario, dev.fun, which previously appeared with the concept of AppFi, appears to be more traditional. At first glance, everything from color scheme to UI is similar to Pumpfun, but it seems to be more vibrant in some way. Although dev.fun, like other AI projects, has experienced a significant decline in price during this cycle, it is surprising that nearly 13,000 Apps have emerged on this platform.
dev.fun offers the functionality to generate Apps simply by chatting with AI "similar to the previously YC-backed Replit." Besides issuing tokens for projects/Memes, users can also choose their own trading pairs. Buidl, which currently has the most supporters, has a total of 1400 Apps and has been run nearly 70,000 times.
There have been multiple AI projects collaborating with dev.fun to expand its core functionality, including Zala, which recently surged to a $6 million market cap and is a collaboration between HoloWorld and devfun.
As both the AI market and the on-chain market regain momentum, the market sentiment seems to be ignited ever so slightly. However, unlike the last AI Agent craze, there have not been many innovative concept products appearing in the market. If the old concepts continue to prevail, the CryptoAI market may also encounter a corresponding bottleneck. While participating in high-heat projects, one also needs to consider the actual benefits and topic sustainability behind them.
The AI track regains momentum, comprehensively reviewing potential projects and market hype logic
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China's Central Bank and Eight Other Departments' Latest Regulatory Focus: Key Attention to RWA Tokenized Asset Risk
Foreword: Today, the People's Bank of China's website published the "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, China Banking and Insurance Regulatory Commission, China Securities Regulatory Commission, State Administration of Foreign Exchange on Further Preventing and Dealing with Risks Related to Virtual Currency and Others (Yinfa [2026] No. 42)", the latest regulatory requirements from the eight departments including the central bank, which are basically consistent with the regulatory requirements of recent years. The main focus of the regulation is on speculative activities such as virtual currency trading, exchanges, ICOs, overseas platform services, and this time, regulatory oversight of RWA has been added, explicitly prohibiting RWA tokenization, stablecoins (especially those pegged to the RMB). The following is the full text:
To the people's governments of all provinces, autonomous regions, and municipalities directly under the Central Government, the Xinjiang Production and Construction Corps:
Recently, there have been speculative activities related to virtual currency and Real-World Assets (RWA) tokenization, disrupting the economic and financial order and jeopardizing the property security of the people. In order to further prevent and address the risks related to virtual currency and Real-World Assets tokenization, effectively safeguard national security and social stability, in accordance with the "Law of the People's Republic of China on the People's Bank of China," "Law of the People's Republic of China on Commercial Banks," "Securities Law of the People's Republic of China," "Law of the People's Republic of China on Securities Investment Funds," "Law of the People's Republic of China on Futures and Derivatives," "Cybersecurity Law of the People's Republic of China," "Regulations of the People's Republic of China on the Administration of Renminbi," "Regulations on Prevention and Disposal of Illegal Fundraising," "Regulations of the People's Republic of China on Foreign Exchange Administration," "Telecommunications Regulations of the People's Republic of China," and other provisions, after reaching consensus with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, and with the approval of the State Council, the relevant matters are notified as follows:
(I) Virtual currency does not possess the legal status equivalent to fiat currency. Virtual currencies such as Bitcoin, Ether, Tether, etc., have the main characteristics of being issued by non-monetary authorities, using encryption technology and distributed ledger or similar technology, existing in digital form, etc. They do not have legal tender status, should not and cannot be circulated and used as currency in the market.
The business activities related to virtual currency are classified as illegal financial activities. The exchange of fiat currency and virtual currency within the territory, exchange of virtual currencies, acting as a central counterparty in buying and selling virtual currencies, providing information intermediary and pricing services for virtual currency transactions, token issuance financing, and trading of virtual currency-related financial products, etc., fall under illegal financial activities, such as suspected illegal issuance of token vouchers, unauthorized public issuance of securities, illegal operation of securities and futures business, illegal fundraising, etc., are strictly prohibited across the board and resolutely banned in accordance with the law. Overseas entities and individuals are not allowed to provide virtual currency-related services to domestic entities in any form.
A stablecoin pegged to a fiat currency indirectly fulfills some functions of the fiat currency in circulation. Without the consent of relevant authorities in accordance with the law and regulations, any domestic or foreign entity or individual is not allowed to issue a RMB-pegged stablecoin overseas.
（II）Tokenization of Real-World Assets refers to the use of encryption technology and distributed ledger or similar technologies to transform ownership rights, income rights, etc., of assets into tokens (tokens) or other interests or bond certificates with token (token) characteristics, and carry out issuance and trading activities.
Engaging in the tokenization of real-world assets domestically, as well as providing related intermediary, information technology services, etc., which are suspected of illegal issuance of token vouchers, unauthorized public offering of securities, illegal operation of securities and futures business, illegal fundraising, and other illegal financial activities, shall be prohibited; except for relevant business activities carried out with the approval of the competent authorities in accordance with the law and regulations and relying on specific financial infrastructures. Overseas entities and individuals are not allowed to illegally provide services related to the tokenization of real-world assets to domestic entities in any form.
(III) Inter-agency Coordination. The People's Bank of China, together with 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 China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, the State Administration of Foreign Exchange, and other departments, will improve the work mechanism, strengthen coordination with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, coordinate efforts, and overall guide regions to carry out risk prevention and disposal of virtual currency-related illegal financial activities.
The China Securities Regulatory Commission, together with the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Public Security, the People's Bank of China, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the State Administration of Foreign Exchange, and other departments, will improve the work mechanism, strengthen coordination with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, coordinate efforts, and overall guide regions to carry out risk prevention and disposal of illegal financial activities related to the tokenization of real-world assets.
(IV) Strengthening Local Implementation. The people's governments at the provincial level are overall responsible for the prevention and disposal of risks related to virtual currencies and the tokenization of real-world assets in their respective administrative regions. The specific leading department is the local financial regulatory department, with participation from branches and dispatched institutions of the State Council's financial regulatory department, telecommunications regulators, public security, market supervision, and other departments, in coordination with cyberspace departments, courts, and procuratorates, to improve the normalization of the work mechanism, effectively connect with the relevant work mechanisms of central departments, form a cooperative and coordinated working pattern between central and local governments, effectively prevent and properly handle risks related to virtual currencies and the tokenization of real-world assets, and maintain economic and financial order and social stability.
(5) Enhanced Risk Monitoring. The People's Bank of China, China Securities Regulatory Commission, National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public Security, State Administration of Foreign Exchange, Cyberspace Administration of China, and other departments continue to improve monitoring techniques and system support, enhance cross-departmental data analysis and sharing, establish sound information sharing and cross-validation mechanisms, promptly grasp the risk situation of activities related to virtual currency and real-world asset tokenization. Local governments at all levels give full play to the role of local monitoring and early warning mechanisms. Local financial regulatory authorities, together with branches and agencies of the State Council's financial regulatory authorities, as well as departments of cyberspace and public security, ensure effective connection between online monitoring, offline investigation, and fund tracking, efficiently and accurately identify activities related to virtual currency and real-world asset tokenization, promptly share risk information, improve early warning information dissemination, verification, and rapid response mechanisms.
(6) Strengthened Oversight of Financial Institutions, Intermediaries, and Technology Service Providers. Financial institutions (including non-bank payment institutions) are prohibited from providing account opening, fund transfer, and clearing services for virtual currency-related business activities, issuing and selling financial products related to virtual currency, including virtual currency and related financial products in the scope of collateral, conducting insurance business related to virtual currency, or including virtual currency in the scope of insurance liability. Financial institutions (including non-bank payment institutions) are prohibited from providing custody, clearing, and settlement services for unauthorized real-world asset tokenization-related business and related financial products. Relevant intermediary institutions and information technology service providers are prohibited from providing intermediary, technical, or other services for unauthorized real-world asset tokenization-related businesses and related financial products.
(7) Enhanced Management of Internet Information Content and Access. Internet enterprises are prohibited from providing online business venues, commercial displays, marketing, advertising, or paid traffic diversion services for virtual currency and real-world asset tokenization-related business activities. Upon discovering clues of illegal activities, they should promptly report to relevant departments and provide technical support and assistance for related investigations and inquiries. Based on the clues transferred by the financial regulatory authorities, the cyberspace administration, telecommunications authorities, and public security departments should promptly close and deal with websites, mobile applications (including mini-programs), and public accounts engaged in virtual currency and real-world asset tokenization-related business activities in accordance with the law.
(8) Strengthened Entity Registration and Advertisement Management. Market supervision departments strengthen entity registration and management, and enterprise and individual business registrations must not contain terms such as "virtual currency," "virtual asset," "cryptocurrency," "crypto asset," "stablecoin," "real-world asset tokenization," or "RWA" in their names or business scopes. Market supervision departments, together with financial regulatory authorities, legally enhance the supervision of advertisements related to virtual currency and real-world asset tokenization, promptly investigating and handling relevant illegal advertisements.
（IX） Continued Rectification of Virtual Currency Mining Activities. The National Development and Reform Commission, together with relevant departments, strictly controls virtual currency mining activities, continuously promotes the rectification of virtual currency mining activities. The people's governments of various provinces take overall responsibility for the rectification of "mining" within their respective administrative regions. In accordance with the requirements of the National Development and Reform Commission and other departments in the "Notice on the Rectification of Virtual Currency Mining Activities" (NDRC Energy-saving Building [2021] No. 1283) and the provisions of the "Guidance Catalog for Industrial Structure Adjustment (2024 Edition)," a comprehensive review, investigation, and closure of existing virtual currency mining projects are conducted, new mining projects are strictly prohibited, and mining machine production enterprises are strictly prohibited from providing mining machine sales and other services within the country.
（X） Severe Crackdown on Related Illegal Financial Activities. Upon discovering clues to illegal financial activities related to virtual currency and the tokenization of real-world assets, local financial regulatory authorities, branches of the State Council's financial regulatory authorities, and other relevant departments promptly investigate, determine, and properly handle the issues in accordance with the law, and seriously hold the relevant entities and individuals legally responsible. Those suspected of crimes are transferred to the judicial authorities for processing according to the law.
（XI） Severe Crackdown on Related Illegal and Criminal Activities. The Ministry of Public Security, the People's Bank of China, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, as well as judicial and procuratorial organs, in accordance with their respective responsibilities, rigorously crack down on illegal and criminal activities related to virtual currency, the tokenization of real-world assets, such as fraud, money laundering, illegal business operations, pyramid schemes, illegal fundraising, and other illegal and criminal activities carried out under the guise of virtual currency, the tokenization of real-world assets, etc.
（XII） Strengthen Industry Self-discipline. Relevant industry associations should enhance membership management and policy advocacy, based on their own responsibilities, advocate and urge member units to resist illegal financial activities related to virtual currency and the tokenization of real-world assets. Member units that violate regulatory policies and industry self-discipline rules are to be disciplined in accordance with relevant self-regulatory management regulations. By leveraging various industry infrastructure, conduct risk monitoring related to virtual currency, the tokenization of real-world assets, and promptly transfer issue clues to relevant departments.
（XIII） Without the approval of relevant departments in accordance with the law and regulations, domestic entities and foreign entities controlled by them may not issue virtual currency overseas.
（XIV） Domestic entities engaging directly or indirectly in overseas external debt-based tokenization of real-world assets, or conducting asset securitization activities abroad based on domestic ownership rights, income rights, etc. (hereinafter referred to as domestic equity), should be strictly regulated in accordance with the principles of "same business, same risk, same rules." The National Development and Reform Commission, the China Securities Regulatory Commission, the State Administration of Foreign Exchange, and other relevant departments regulate it according to their respective responsibilities. For other forms of overseas real-world asset tokenization activities based on domestic equity by domestic entities, the China Securities Regulatory Commission, together with relevant departments, supervise according to their division of responsibilities. Without the consent and filing of relevant departments, no unit or individual may engage in the above-mentioned business.
(15) Overseas subsidiaries and branches of domestic financial institutions providing Real World Asset Tokenization-related services overseas shall do so legally and prudently. They shall have professional personnel and systems in place to effectively mitigate business risks, strictly implement customer onboarding, suitability management, anti-money laundering requirements, and incorporate them into the domestic financial institutions' compliance and risk management system. Intermediaries and information technology service providers offering Real World Asset Tokenization services abroad based on domestic equity or conducting Real World Asset Tokenization business in the form of overseas debt for domestic entities directly or indirectly venturing abroad must strictly comply with relevant laws and regulations. They should establish and improve relevant compliance and internal control systems in accordance with relevant normative requirements, strengthen business and risk control, and report the business developments to the relevant regulatory authorities for approval or filing.
(16) Strengthen organizational leadership and overall coordination. All departments and regions should attach great importance to the prevention of risks related to virtual currencies and Real World Asset Tokenization, strengthen organizational leadership, clarify work responsibilities, form a long-term effective working mechanism with centralized coordination, local implementation, and shared responsibilities, maintain high pressure, dynamically monitor risks, effectively prevent and mitigate risks in an orderly and efficient manner, legally protect the property security of the people, and make every effort to maintain economic and financial order and social stability.
(17) Widely carry out publicity and education. All departments, regions, and industry associations should make full use of various media and other communication channels to disseminate information through legal and policy interpretation, analysis of typical cases, and education on investment risks, etc. They should promote the illegality and harm of virtual currencies and Real World Asset Tokenization-related businesses and their manifestations, fully alert to potential risks and hidden dangers, and enhance public awareness and identification capabilities for risk prevention.
(18) Engaging in illegal financial activities related to virtual currencies and Real World Asset Tokenization in violation of this notice, as well as providing services for virtual currencies and Real World Asset Tokenization-related businesses, shall be punished in accordance with relevant regulations. If it constitutes a crime, criminal liability shall be pursued according to the law. For domestic entities and individuals who knowingly or should have known that overseas entities illegally provided virtual currency or Real World Asset Tokenization-related services to domestic entities and still assisted them, relevant responsibilities shall be pursued according to the law. If it constitutes a crime, criminal liability shall be pursued according to the law.
(19) If any unit or individual invests in virtual currencies, Real World Asset Tokens, and related financial products against public order and good customs, the relevant civil legal actions shall be invalid, and any resulting losses shall be borne by them. If there are suspicions of disrupting financial order and jeopardizing financial security, the relevant departments shall deal with them according to the law.
This notice shall enter into force upon the date of its issuance. The People's Bank of China and ten other departments' "Notice on Further Preventing and Dealing with the Risks of Virtual Currency Trading Speculation" (Yinfa [2021] No. 237) is hereby repealed.
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China's Central Bank and Eight Other Departments' Latest Regulatory Focus: Key Attention to RWA Tokenized Asset Risk
Foreword: Today, the People's Bank of China's website published the "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, China Banking and Insurance Regulatory Commission, China Securities Regulatory Commission, State Administration of Foreign Exchange on Further Preventing and Dealing with Risks Related to Virtual Currency and Others (Yinfa [2026] No. 42)", the latest regulatory requirements from the eight departments including the central bank, which are basically consistent with the regulatory requirements of recent years. The main focus of the regulation is on speculative activities such as virtual currency trading, exchanges, ICOs, overseas platform services, and this time, regulatory oversight of RWA has been added, explicitly prohibiting RWA tokenization, stablecoins (especially those pegged to the RMB). The following is the full text:
To the people's governments of all provinces, autonomous regions, and municipalities directly under the Central Government, the Xinjiang Production and Construction Corps:
Recently, there have been speculative activities related to virtual currency and Real-World Assets (RWA) tokenization, disrupting the economic and financial order and jeopardizing the property security of the people. In order to further prevent and address the risks related to virtual currency and Real-World Assets tokenization, effectively safeguard national security and social stability, in accordance with the "Law of the People's Republic of China on the People's Bank of China," "Law of the People's Republic of China on Commercial Banks," "Securities Law of the People's Republic of China," "Law of the People's Republic of China on Securities Investment Funds," "Law of the People's Republic of China on Futures and Derivatives," "Cybersecurity Law of the People's Republic of China," "Regulations of the People's Republic of China on the Administration of Renminbi," "Regulations on Prevention and Disposal of Illegal Fundraising," "Regulations of the People's Republic of China on Foreign Exchange Administration," "Telecommunications Regulations of the People's Republic of China," and other provisions, after reaching consensus with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, and with the approval of the State Council, the relevant matters are notified as follows:
(I) Virtual currency does not possess the legal status equivalent to fiat currency. Virtual currencies such as Bitcoin, Ether, Tether, etc., have the main characteristics of being issued by non-monetary authorities, using encryption technology and distributed ledger or similar technology, existing in digital form, etc. They do not have legal tender status, should not and cannot be circulated and used as currency in the market.
The business activities related to virtual currency are classified as illegal financial activities. The exchange of fiat currency and virtual currency within the territory, exchange of virtual currencies, acting as a central counterparty in buying and selling virtual currencies, providing information intermediary and pricing services for virtual currency transactions, token issuance financing, and trading of virtual currency-related financial products, etc., fall under illegal financial activities, such as suspected illegal issuance of token vouchers, unauthorized public issuance of securities, illegal operation of securities and futures business, illegal fundraising, etc., are strictly prohibited across the board and resolutely banned in accordance with the law. Overseas entities and individuals are not allowed to provide virtual currency-related services to domestic entities in any form.
A stablecoin pegged to a fiat currency indirectly fulfills some functions of the fiat currency in circulation. Without the consent of relevant authorities in accordance with the law and regulations, any domestic or foreign entity or individual is not allowed to issue a RMB-pegged stablecoin overseas.
（II）Tokenization of Real-World Assets refers to the use of encryption technology and distributed ledger or similar technologies to transform ownership rights, income rights, etc., of assets into tokens (tokens) or other interests or bond certificates with token (token) characteristics, and carry out issuance and trading activities.
Engaging in the tokenization of real-world assets domestically, as well as providing related intermediary, information technology services, etc., which are suspected of illegal issuance of token vouchers, unauthorized public offering of securities, illegal operation of securities and futures business, illegal fundraising, and other illegal financial activities, shall be prohibited; except for relevant business activities carried out with the approval of the competent authorities in accordance with the law and regulations and relying on specific financial infrastructures. Overseas entities and individuals are not allowed to illegally provide services related to the tokenization of real-world assets to domestic entities in any form.
(III) Inter-agency Coordination. The People's Bank of China, together with 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 China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, the State Administration of Foreign Exchange, and other departments, will improve the work mechanism, strengthen coordination with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, coordinate efforts, and overall guide regions to carry out risk prevention and disposal of virtual currency-related illegal financial activities.
The China Securities Regulatory Commission, together with the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Public Security, the People's Bank of China, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the State Administration of Foreign Exchange, and other departments, will improve the work mechanism, strengthen coordination with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, coordinate efforts, and overall guide regions to carry out risk prevention and disposal of illegal financial activities related to the tokenization of real-world assets.
(IV) Strengthening Local Implementation. The people's governments at the provincial level are overall responsible for the prevention and disposal of risks related to virtual currencies and the tokenization of real-world assets in their respective administrative regions. The specific leading department is the local financial regulatory department, with participation from branches and dispatched institutions of the State Council's financial regulatory department, telecommunications regulators, public security, market supervision, and other departments, in coordination with cyberspace departments, courts, and procuratorates, to improve the normalization of the work mechanism, effectively connect with the relevant work mechanisms of central departments, form a cooperative and coordinated working pattern between central and local governments, effectively prevent and properly handle risks related to virtual currencies and the tokenization of real-world assets, and maintain economic and financial order and social stability.
(5) Enhanced Risk Monitoring. The People's Bank of China, China Securities Regulatory Commission, National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public Security, State Administration of Foreign Exchange, Cyberspace Administration of China, and other departments continue to improve monitoring techniques and system support, enhance cross-departmental data analysis and sharing, establish sound information sharing and cross-validation mechanisms, promptly grasp the risk situation of activities related to virtual currency and real-world asset tokenization. Local governments at all levels give full play to the role of local monitoring and early warning mechanisms. Local financial regulatory authorities, together with branches and agencies of the State Council's financial regulatory authorities, as well as departments of cyberspace and public security, ensure effective connection between online monitoring, offline investigation, and fund tracking, efficiently and accurately identify activities related to virtual currency and real-world asset tokenization, promptly share risk information, improve early warning information dissemination, verification, and rapid response mechanisms.
(6) Strengthened Oversight of Financial Institutions, Intermediaries, and Technology Service Providers. Financial institutions (including non-bank payment institutions) are prohibited from providing account opening, fund transfer, and clearing services for virtual currency-related business activities, issuing and selling financial products related to virtual currency, including virtual currency and related financial products in the scope of collateral, conducting insurance business related to virtual currency, or including virtual currency in the scope of insurance liability. Financial institutions (including non-bank payment institutions) are prohibited from providing custody, clearing, and settlement services for unauthorized real-world asset tokenization-related business and related financial products. Relevant intermediary institutions and information technology service providers are prohibited from providing intermediary, technical, or other services for unauthorized real-world asset tokenization-related businesses and related financial products.
(7) Enhanced Management of Internet Information Content and Access. Internet enterprises are prohibited from providing online business venues, commercial displays, marketing, advertising, or paid traffic diversion services for virtual currency and real-world asset tokenization-related business activities. Upon discovering clues of illegal activities, they should promptly report to relevant departments and provide technical support and assistance for related investigations and inquiries. Based on the clues transferred by the financial regulatory authorities, the cyberspace administration, telecommunications authorities, and public security departments should promptly close and deal with websites, mobile applications (including mini-programs), and public accounts engaged in virtual currency and real-world asset tokenization-related business activities in accordance with the law.
(8) Strengthened Entity Registration and Advertisement Management. Market supervision departments strengthen entity registration and management, and enterprise and individual business registrations must not contain terms such as "virtual currency," "virtual asset," "cryptocurrency," "crypto asset," "stablecoin," "real-world asset tokenization," or "RWA" in their names or business scopes. Market supervision departments, together with financial regulatory authorities, legally enhance the supervision of advertisements related to virtual currency and real-world asset tokenization, promptly investigating and handling relevant illegal advertisements.
（IX） Continued Rectification of Virtual Currency Mining Activities. The National Development and Reform Commission, together with relevant departments, strictly controls virtual currency mining activities, continuously promotes the rectification of virtual currency mining activities. The people's governments of various provinces take overall responsibility for the rectification of "mining" within their respective administrative regions. In accordance with the requirements of the National Development and Reform Commission and other departments in the "Notice on the Rectification of Virtual Currency Mining Activities" (NDRC Energy-saving Building [2021] No. 1283) and the provisions of the "Guidance Catalog for Industrial Structure Adjustment (2024 Edition)," a comprehensive review, investigation, and closure of existing virtual currency mining projects are conducted, new mining projects are strictly prohibited, and mining machine production enterprises are strictly prohibited from providing mining machine sales and other services within the country.
（X） Severe Crackdown on Related Illegal Financial Activities. Upon discovering clues to illegal financial activities related to virtual currency and the tokenization of real-world assets, local financial regulatory authorities, branches of the State Council's financial regulatory authorities, and other relevant departments promptly investigate, determine, and properly handle the issues in accordance with the law, and seriously hold the relevant entities and individuals legally responsible. Those suspected of crimes are transferred to the judicial authorities for processing according to the law.
（XI） Severe Crackdown on Related Illegal and Criminal Activities. The Ministry of Public Security, the People's Bank of China, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, as well as judicial and procuratorial organs, in accordance with their respective responsibilities, rigorously crack down on illegal and criminal activities related to virtual currency, the tokenization of real-world assets, such as fraud, money laundering, illegal business operations, pyramid schemes, illegal fundraising, and other illegal and criminal activities carried out under the guise of virtual currency, the tokenization of real-world assets, etc.
（XII） Strengthen Industry Self-discipline. Relevant industry associations should enhance membership management and policy advocacy, based on their own responsibilities, advocate and urge member units to resist illegal financial activities related to virtual currency and the tokenization of real-world assets. Member units that violate regulatory policies and industry self-discipline rules are to be disciplined in accordance with relevant self-regulatory management regulations. By leveraging various industry infrastructure, conduct risk monitoring related to virtual currency, the tokenization of real-world assets, and promptly transfer issue clues to relevant departments.
（XIII） Without the approval of relevant departments in accordance with the law and regulations, domestic entities and foreign entities controlled by them may not issue virtual currency overseas.
（XIV） Domestic entities engaging directly or indirectly in overseas external debt-based tokenization of real-world assets, or conducting asset securitization activities abroad based on domestic ownership rights, income rights, etc. (hereinafter referred to as domestic equity), should be strictly regulated in accordance with the principles of "same business, same risk, same rules." The National Development and Reform Commission, the China Securities Regulatory Commission, the State Administration of Foreign Exchange, and other relevant departments regulate it according to their respective responsibilities. For other forms of overseas real-world asset tokenization activities based on domestic equity by domestic entities, the China Securities Regulatory Commission, together with relevant departments, supervise according to their division of responsibilities. Without the consent and filing of relevant departments, no unit or individual may engage in the above-mentioned business.
(15) Overseas subsidiaries and branches of domestic financial institutions providing Real World Asset Tokenization-related services overseas shall do so legally and prudently. They shall have professional personnel and systems in place to effectively mitigate business risks, strictly implement customer onboarding, suitability management, anti-money laundering requirements, and incorporate them into the domestic financial institutions' compliance and risk management system. Intermediaries and information technology service providers offering Real World Asset Tokenization services abroad based on domestic equity or conducting Real World Asset Tokenization business in the form of overseas debt for domestic entities directly or indirectly venturing abroad must strictly comply with relevant laws and regulations. They should establish and improve relevant compliance and internal control systems in accordance with relevant normative requirements, strengthen business and risk control, and report the business developments to the relevant regulatory authorities for approval or filing.
(16) Strengthen organizational leadership and overall coordination. All departments and regions should attach great importance to the prevention of risks related to virtual currencies and Real World Asset Tokenization, strengthen organizational leadership, clarify work responsibilities, form a long-term effective working mechanism with centralized coordination, local implementation, and shared responsibilities, maintain high pressure, dynamically monitor risks, effectively prevent and mitigate risks in an orderly and efficient manner, legally protect the property security of the people, and make every effort to maintain economic and financial order and social stability.
(17) Widely carry out publicity and education. All departments, regions, and industry associations should make full use of various media and other communication channels to disseminate information through legal and policy interpretation, analysis of typical cases, and education on investment risks, etc. They should promote the illegality and harm of virtual currencies and Real World Asset Tokenization-related businesses and their manifestations, fully alert to potential risks and hidden dangers, and enhance public awareness and identification capabilities for risk prevention.
(18) Engaging in illegal financial activities related to virtual currencies and Real World Asset Tokenization in violation of this notice, as well as providing services for virtual currencies and Real World Asset Tokenization-related businesses, shall be punished in accordance with relevant regulations. If it constitutes a crime, criminal liability shall be pursued according to the law. For domestic entities and individuals who knowingly or should have known that overseas entities illegally provided virtual currency or Real World Asset Tokenization-related services to domestic entities and still assisted them, relevant responsibilities shall be pursued according to the law. If it constitutes a crime, criminal liability shall be pursued according to the law.
(19) If any unit or individual invests in virtual currencies, Real World Asset Tokens, and related financial products against public order and good customs, the relevant civil legal actions shall be invalid, and any resulting losses shall be borne by them. If there are suspicions of disrupting financial order and jeopardizing financial security, the relevant departments shall deal with them according to the law.
This notice shall enter into force upon the date of its issuance. The People's Bank of China and ten other departments' "Notice on Further Preventing and Dealing with the Risks of Virtual Currency Trading Speculation" (Yinfa [2021] No. 237) is hereby repealed.
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