- Buy Crypto
- Markets
Futures- Spot
- Copy Trade
Earn- More
Election, Oil Price, and Money Printer: Why Bitcoin Only Looks at Trump
Original Title: Smoothly
Original Author: Arthur Hayes, Crypto Trader Digest
Translation: Peggy, BlockBeats
Editor's Note: Amidst the noise of geopolitics, electioneering, and macro narratives, in this article, author Arthur Hayes (co-founder of crypto exchange BitMEX) deliberately avoids moral judgment and values alignment. Instead, he takes on a cold-eyed trader's perspective, compressing complex issues into a few core variables that can be market-verified: nominal GDP, oil prices, credit expansion, and the consequent pricing of risk assets.
As one of the most controversial and representative voices in the crypto market, Hayes consistently dissects the trading implications behind political events from the standpoints of power, liquidity, and price. In this article, he distills the U.S. election, energy prices, and money-printing logic into a naked question: Will the money printing continue, and will risk assets continue to rise?
The following is the original text:
A "Overheard Conversation"
Scene: U.S. President Donald Trump connects via video link to a plane carrying Venezuelan President Pepe Maduro from Caracas to New York.
Trump: Pepe Maduro, you're one bad hombre. Your country's oil is now mine. USA! USA! USA!
Pepe Maduro: Damn it! You crazy American.
I can imagine at this moment, a group of Venezuelan expatriates in the "Drug-Financing Capital of the Western Hemisphere" — Miami, USA — are completely letting loose, dancing to the rhythm of Elvis Crespo's "Suavemente."
As a qualified "armchair general" macroeconomic gambler, I must, of course, offer my opinion on this historic, game-changing, dictatorial, militarized... insert whatever superlative or pejorative you want here — U.S. "kidnapping/legal arrest" of a sovereign nation's leader.
I'm sure countless AI-assisted writers are churning out millions of tokens of "word salad," attempting to qualify, model, and predict the course of these events. They will moralize these actions from a high ground and tell you how other countries "should respond."
I do none of that.
I only care about one question: Will the U.S. colonization of Venezuela cause the price of Bitcoin/cryptocurrency to rise or fall?
I'm a ski bum, and in order to make sense of this chaotic universe, I need a simple analytical framework. Once again, let me emphasize: all politicians elected through democratic elections have one core goal at all times, which is re-election.
Glory to God, loyalty to the nation, or any lofty ideals come after winning votes. This is because if you are not in a position of power, you cannot make any changes. In this sense, this obsession with re-election is "rational."
For U.S. President Trump, there are two elections that truly matter: the November midterms and the presidential election in 2028.
Although he himself will neither seek re-election in 2026 nor be able to run for president for a third time in 2028, the loyalty and obedience of his political supporters depend on whether they can each successfully secure re-election. Today, people are constantly "defecting" from within the tattered MAGA tent because they are worried that if they continue to act according to Trump's demands, their future electoral prospects will dim.
So the question is: What can Trump do to ensure that those who have not yet decided where to stand — those middle-of-the-road voters who are not fully "blue team Democrats" or fully "red team Republicans" — walk into the polling stations in 2026 and 2028 and vote "in the right way"?
As of now, the blue team (Democratic Party) is poised to retake the House. If Trump still wants to come out on top, he needs to quickly get things in order; there is not much time left for policy U-turns and inducing voters to switch sides.
Most importantly, I will use some statistics and charts to prove that the only issue the median voter truly cares about is the economy. The cultural issues that Trump's opponents and supporters obsess over on social media (although the memes are indeed good), pale in comparison to whether voters feel "richer or poorer" when they walk into the voting booth and pull the curtain.
Stimulating the economy is actually quite easy; I'm referring to nominal GDP. This is essentially just one question: How much credit is Trump willing to create. An increase in nominal GDP will drive up financial asset prices; the wealthy will also "dutifully" hand over their "bribes" — ahem, I mean, make campaign donations to the red team as a show of gratitude. But in America, the rule is one person, one vote, and if alongside the rise in nominal GDP, there is a surge in inflation, the lower-income groups have the complete ability to drag down the entire party.
Trump and U.S. Treasury Secretary "Wild Bill" Benshot have stated that they will let the economy run hot. I believe they will do so, but the question is: how do they plan to control inflation?
The inflation that will truly sink re-election prospects is food and energy inflation. For Americans, the most crucial indicator is gasoline prices, as usable and affordable public transportation is almost nonexistent for most people. In the U.S., if you are a proletarian laborer without a car, you can hardly live a normal life—unfortunately, but that's reality. It is for this reason that Trump and his aides are willing to "colonize" Venezuela for oil.
When it comes to Venezuelan oil, many will immediately point out: this country has the world's largest proven oil reserves. But the question is, who cares how much oil you have underground? The key is: can this oil be extracted profitably?
I don't know the answer to this question, but Trump apparently believes that as long as he turns the valve, Venezuelan oil will flow continuously to the refineries along the Gulf of Mexico, and cheap gasoline will appease the lower classes by suppressing energy inflation. I cannot say whether Trump is correct, but the WTI and Brent crude oil markets will become the real "truth serum".
The question is: as nominal GDP and U.S. dollar credit supply rise, will oil prices rise or fall?
If GDP and oil prices rise together, the winner is the blue team Democrats; if GDP rises but oil prices stagnate or fall, the winner is the red team Republicans.
The most ingenious part of this analytical framework is: will oil prices reflect all other oil-producing nations and military powers—especially Saudi Arabia, Russia, and China—and their reactions to the U.S. "colonizing" Venezuela.
Another advantage is: the market is reflexive. We all know that Trump will adjust policies based on the stock market, U.S. debt, and oil prices. As long as the stock market continues to rise and oil prices remain low, he will continue to print money, expand, and act around oil.
As investors, we can react on a time scale almost synchronous with Trump—this is the best outcome we can expect. This approach reduces the need to predict the ultimate outcome of an extremely complex geopolitical system. Look at the charts, go with the flow, gamblers.
Below are some charts and statistics that clearly show: if Trump wants to win the election, he must boost nominal GDP while aggressively pushing down oil prices.
The Red Team and the Blue Team are evenly matched.
Only a small fraction of Americans determine which party ultimately controls the government.
The economy and inflation are the two main concerns for voters, nothing else matters.
“10% Rule”: If, in the three months before an election, the national average gasoline price has risen by 10% or more compared to the average level in January of the same calendar year, one or more branches of the government often undergo a change in party control.
Bitcoin Mooning
Due to the energy-intensive nature of Proof of Work (PoW) mining, Bitcoin is the purest form of monetary abstraction. Therefore, energy prices themselves have no direct relationship with the price of Bitcoin—because whether energy prices rise or fall, all miners will simultaneously face the same direction of cost change.
Where oil prices truly matter is whether they will force politicians to stop printing money. If due to economic expansion (where economic activity itself is a derivative variable of energy), oil prices rise too quickly and too high, then politicians must find a way to push oil prices down—such as by "getting oil from elsewhere" or slowing down credit creation—otherwise, they risk being voted out of office by the electorate.
The 10-year US Treasury yield and the MOVE Index, which measures US bond market volatility, will tell us whether oil prices have become unbearable.
Investors face a difficult choice: investing in financial assets or investing in physical assets.
When energy costs are low and stable, investing in government bonds and other financial assets is reasonable; but when energy costs are high and volatile, it is more prudent to store wealth in energy commodities.
Thus, when oil prices reach a certain level, investors will demand higher returns from government bonds, especially 10-year US Treasury bonds. US politicians cannot stop deficit spending because "free money" is always a winning strategy in elections.
When oil prices rise and the 10-year Treasury yield approaches 5%, politicians have to change their behavior. The reason is: as the 10-year yield nears 5%, the massive leverage embedded in this dirty fiat financial system starts to spiral out of control, and bond market volatility (measured by the MOVE index) will sharply rise.
The entire fiat system is fundamentally a highly leveraged carry trade. When volatility spikes, investors must sell assets, or even their custom Savile Row suits won't save them.
A recent example is: last year's April 2nd "Liberation Day," followed by the April 9th "Trump TACO" event.
If you recall, at that time, Trump threatened to impose exorbitant tariffs, high enough to truly disrupt global trade and financial imbalances — which would be highly deflationary at a macro level. The market immediately plunged, with the MOVE index spiking intraday to a high of 172.
Then, the day after the volatility spike, Trump "blinked" (TACO), announcing a "pause" in tariff measures, and the market bottomed out, followed by a rapid and robust rebound.
MOVE index (white line) vs. Nasdaq 100 index (yellow line)
Trying to use historical data to determine at what levels of oil prices and 10-year U.S. Treasury yields Trump would tighten the Fed's printing press is meaningless. When it actually happens, we will naturally know; if oil prices and yields start to spike, it means — time to be cautious on risk assets.
The base case is: oil prices stay low, even drop outright, while Trump and "Buffalo Bill" Benson go on a money-printing spree as they did in 2020. The reason is, the market will initially believe: U.S. control of Venezuelan oil will lead to a massive increase in crude oil production. As for whether these optimistic forecasts of a surge in oil supply can materialize once engineers truly bring millions of barrels per day of capacity online, no one can say for sure.
But that doesn't matter. You just need to remember one thing: Trump will run the printing press faster than Israeli PM Benjamin "Bibi the Butcher" Netanyahu cycles through "why Iran deserves another military strike" talking points.
If this logic isn't enough to convince you that now is the time to go long on all risk assets due to America's radical money printing, then remember — Trump is the most "socialist" U.S. president since Roosevelt.
He once printed trillions of dollars, and unlike past presidents, in 2020 he sent money directly to everyone. You better believe he will never lose an election due to "running out of money."
Mamdhani and Trump are both New Yorkers, you know — birds of a feather flock together.
A true trader must stop projecting emotions onto words like "socialism, communism, capitalism." No government truly adheres to these "-isms"; everyone is simply distorting and assembling these concepts for their own political purposes.
Don't be a sucker, just buy directly.
If we understand the situation according to Trump and his staff, one thing is certain: credit will definitely expand.
Red Team Republican legislators will continue deficit spending; the Treasury led by "Buffalo Bill" Benson will issue bonds to finance it; and that "Beta Soy, Towel Boy" Jerome Powell and the Fed under his and his successor's leadership will print money to buy those bonds.
This "self-hyping loop" truly kicked off in 2008. As Lyn Alden put it: "There's nothing to stop this train."
As the quantity of dollars continues to inflate, the price of Bitcoin and some cryptocurrencies will skyrocket.
The rise of Bitcoin (digital gold) is directly linked to money printing. This can be clearly seen in the Dollar Liquidity Conditions Index I've constructed (Bloomberg code: .USDLIQ U Index).
Trading Tactics
Before discussing Maelstrom's current position, I would like to quickly review my trading performance from last year.
When I say "my performance," it's because all trading decisions were made by me personally. Last year, my overall liquidity steering wheel was profitable. My goal was to cover daily expenses with trading profits, and I have achieved this multiple times. Although ultimately profitable, I also wasted a good amount of PNL on several bad trades.
My biggest loss came from immediately participating in trading the PUMP token right after it launched. Additionally, I also had to stay away from meme coins — the only meme coin I made money on was TRUMP.
The good side is: my most profitable trades came from HYPE, BTC, PENDLE, and ETHFI.
Only 33% of last year's trades were profitable, but my position sizing was on point: the average return of profitable trades was 8.5 times the average loss of losing trades.
This year, I will improve my performance by focusing on what I'm truly good at: building medium-term large positions based on a clear macro liquidity narrative, and this narrative must be able to support a "sounds reasonable" shitcoin story. As for those meme coins or junk coins that are purely for fun, I will significantly reduce position sizes.
Looking ahead, the core market narrative this year will revolve around privacy. ZEC will be the beta of the privacy track, and we have already built a significant long position in ZEC at a great price in the third quarter of 2025.
The current focus of the Maelstrom team is to find at least one shitcoin leader in the privacy narrative that can truly outperform and bring excess returns to the portfolio in the coming years.
As we enter 2026, Maelstrom's risk exposure is almost maxed out. We will continue to redeploy idle cash generated from various financing trades into Bitcoin, so our stablecoin position is very low.
To achieve excess returns relative to BTC and ETH: I will sell BTC to increase exposure to privacy-related assets; I will sell ETH to increase exposure to DeFi. In both cases, as long as I choose correctly, with fiat credit continuing to expand, these shitcoins I hold should outperform mainstream assets.
If/when oil prices rise and lead to a slowdown in credit creation, I hope to take profits at that time, stack more sats, and buy some mETH.
What a fulfilling day.
I wrote this article on a skiing day off in the wilderness. Now it's time to hit the gym hard, lift some heavy iron, make sure that when I "come out of hibernation" in March, my physique is still incredibly strong.
You may also like
Token Cannot Compound, Where Is the Real Investment Opportunity?
February 6th Market Key Intelligence, How Much Did You Miss?
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.
Former Partner's Perspective on Multicoin: Kyle's Exit, But the Game He Left Behind Just Getting Started
Why Bitcoin Is Falling Now: The Real Reasons Behind BTC's Crash & WEEX's Smart Profit Playbook
Bitcoin's ongoing crash explained: Discover the 5 hidden triggers behind BTC's plunge & how WEEX's Auto Earn and Trade to Earn strategies help traders profit from crypto market volatility.
Wall Street's Hottest Trades See Exodus
Vitalik Discusses Ethereum Scaling Path, Circle Announces Partnership with Polymarket, What's the Overseas Crypto Community Talking About Today?
Believing in the Capital Markets - The Essence and Core Value of Cryptocurrency
Polymarket's 'Weatherman': Predict Temperature, Win Million-Dollar Payout
$15K+ Profits: The 4 AI Trading Secrets WEEX Hackathon Prelim Winners Used to Dominate Volatile Crypto Markets
How WEEX Hackathon's top AI trading strategies made $15K+ in crypto markets: 4 proven rules for ETH/BTC trading, market structure analysis, and risk management in volatile conditions.
A nearly 20% one-day plunge, how long has it been since you last saw a $60,000 Bitcoin?
Raoul Pal: I've seen every single panic, and they are never the end.
Key Market Information Discrepancy on February 6th - A Must-Read! | Alpha Morning Report
2026 Crypto Industry's First Snowfall
The Harsh Reality Behind the $26 Billion Crypto Liquidation: Liquidity Is Killing the Market
Why Is Gold, US Stocks, Bitcoin All Falling?
Key Market Intelligence for February 5th, how much did you miss out on?
Wintermute: By 2026, crypto had gradually become the settlement layer of the Internet economy
Token Cannot Compound, Where Is the Real Investment Opportunity?
February 6th Market Key Intelligence, How Much Did You Miss?
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.
Former Partner's Perspective on Multicoin: Kyle's Exit, But the Game He Left Behind Just Getting Started
Why Bitcoin Is Falling Now: The Real Reasons Behind BTC's Crash & WEEX's Smart Profit Playbook
Bitcoin's ongoing crash explained: Discover the 5 hidden triggers behind BTC's plunge & how WEEX's Auto Earn and Trade to Earn strategies help traders profit from crypto market volatility.
App