Core Viewpoint - The article emphasizes the need for stringent measures to prevent and address risks associated with virtual currencies and the tokenization of real-world assets (RWA) to maintain national security and social stability [4][5]. Summary by Sections Nature of Virtual Currencies and RWA Tokenization - Virtual currencies do not possess the same legal status as fiat currencies and are characterized by their non-issuance by monetary authorities, use of encryption technology, and existence in digital form. They lack legal tender status and should not circulate as currency [5]. - Activities related to virtual currencies are classified as illegal financial activities, including exchanges between fiat and virtual currencies, trading virtual currencies, and issuing tokens without authorization [5]. - RWA tokenization involves converting ownership and income rights of assets into tokens using encryption and distributed ledger technology, which is also deemed illegal without proper authorization [6]. Collaborative Mechanisms - A collaborative mechanism among various departments, including the People's Bank of China and the China Securities Regulatory Commission, is established to coordinate efforts in preventing and addressing risks related to virtual currencies and RWA tokenization [8]. Risk Monitoring and Management - Continuous improvement of monitoring technologies and systems is essential for risk assessment related to virtual currencies and RWA tokenization. Local governments are tasked with effective online and offline monitoring to identify and share risk information promptly [10]. Regulation of Financial and Service Institutions - Financial institutions are prohibited from providing services related to virtual currencies, including account opening and fund transfers. They must also refrain from offering custody or settlement services for unauthorized RWA tokenization activities [11]. - Internet companies are restricted from providing platforms for virtual currency and RWA tokenization activities, and must report any illegal activities to authorities [11]. Advertising and Registration Management - Market regulatory authorities are to enhance management of business registrations, ensuring that names and business scopes do not include terms related to virtual currencies or RWA tokenization [12]. Enforcement Against Illegal Activities - Local financial management departments are responsible for investigating and addressing illegal financial activities related to virtual currencies and RWA tokenization, with severe penalties for violations [13]. International Business Regulations - Strict regulations are imposed on domestic entities engaging in virtual currency activities abroad, ensuring compliance with local laws and regulations [15][16]. Organizational Leadership and Public Awareness - A strong organizational framework is necessary for risk prevention, with a focus on public education regarding the risks associated with virtual currencies and RWA tokenization [18][19].

Core Viewpoint - The recent regulatory ban on virtual currencies and Real World Asset (RWA) tokens has led to a significant cooling of the RWA market in China, with a drastic drop in business inquiries and a decline in stock prices of related companies [2][10]. Regulatory Actions - Seven major financial associations in China have jointly issued a risk warning prohibiting their members from participating in the issuance and trading of virtual currencies and RWA tokens within the country [3][4]. - This is the first time RWA has been explicitly mentioned and classified by official entities, signaling a strong regulatory stance against virtual currency-related illegal activities [4][5]. Market Impact - The number of business inquiries from mainland companies regarding RWA projects in Hong Kong has plummeted by over 90% in the past two months, with many ongoing projects being put on hold [2][12]. - Companies involved in RWA concepts, such as Longxin Group and Xiexin Energy Technology, have seen their stock prices drop significantly, with some experiencing a decline of nearly 50% from their peak [2][14]. Industry Response - Many companies that were previously exploring RWA projects are now shifting their focus to Real Data Assets (RDA), a new digital asset form proposed by the Shanghai Data Exchange [13]. - The overall sentiment in the market has shifted from optimism to caution, with companies now responding to inquiries about RWA with standardized statements indicating they are not currently engaged in such activities [14]. Risk Considerations - The regulatory warning highlights multiple risks associated with RWA tokenization, including false asset risks, operational failure risks, and speculative trading risks, with no RWA tokenization activities currently approved by Chinese financial authorities [5][9]. - The rise in fraudulent activities under the guise of RWA projects has prompted regulators to act swiftly, as there have been numerous reports of scams targeting the public [9].