Breaking: China’s crypto regulation enters the 2.0 era Today (February 6), the People’s Bank of China and seven other departments jointly issued document No. 42 [2026]. It continues and strengthens previous regulatory policies, providing clearer definitions for RWA, RMB stablecoins, and full-chain supervision. Three major changes 1️⃣ RWA officially classified as illegal financial activity: All RWA issuance, trading, and technical services within the country are strictly prohibited. Even foreign institutions providing services domestically are targeted. The emerging “compliant RWA narrative” has been shattered. 2️⃣ RMB stablecoins hit the red line: Without approval, no institution is allowed to issue RMB-pegged stablecoins overseas. The compliance path for offshore RMB stablecoins is completely blocked. 3️⃣ Full-chain, penetrative regulation: From financial institutions (prohibited from opening accounts or settling transactions) to internet companies (banned from displaying or directing traffic) to mining equipment sales (completely banned), even “foreign entities controlled by domestic entities” are now under regulation. ⚖️ Deeper signals Just a week ago (January 31), the Ministry of Public Security released the “Cybercrime Prevention Law (Draft for Public Comment),” explicitly listing “using virtual currency to provide fund transfer services” as a criminal offense. What does this mean? - Document No. 42 tells you: Don’t do it (illegal financial activity). - The Cybercrime Prevention Law tells you: If you do it, it’s a crime (aiding cybercrime). Financial regulation + criminal enforcement means OTC traders, exchanges, and wallet service providers now face not just administrative penalties but criminal liability. Our advice For entrepreneurs: Technology may have no borders, but regulation has a long reach. Focus on overseas compliance paths or shift to specific cases within the domestic digital RMB ecosystem. For investors: Emphasize “invest at your own risk.” Similar clauses appeared in the 2021 “924” notice, almost word for word, with RWA being the only addition.