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a16z: How Crypto Startups Can "Earn the Right"
Original Title: Going to market with better messaging: On mission statements and more
Original Authors: Pyrs Carvolth, Maggie Hsu, a16z crypto Partners
Original Translation: Luffy, Foresight News
For founders, being able to clearly communicate the company's vision is crucial. This includes articulating the company's stance, future direction, and differentiation from competitors. At an early stage, especially for companies yet to launch a product, clarifying the company's mission may seem premature. However, a thoughtfully crafted core message can unify the team, help founders establish credibility and clear goals, and more effectively bring the product to market.
There are already many resources available on building a brand and crafting a mission statement that reflects team values. But integrating these elements can be quite challenging.
Therefore, in this article, we will focus on how to adjust and differentiate mission statements from value propositions, as well as how to refine elevator pitches (Translator's Note: An elevator pitch is a brief, concise explanation used to introduce one's company, product, or idea to others in a limited time), for purposes such as partnership relationships, sales enablement, fundraising, and more. We will also share foundational information founders need before bringing a product to market.
A brief overview of ideal customer profiles and how to use them in the crypto space
In this article, we will be using the concept of Ideal Customer Profiles (ICP). This is a well-known business development tool used to define potential customers most likely to purchase your product based on dimensions such as behavior, environment, and demographics.
Why is this important? Ideal Customer Profiles can help you understand your target audience, the "buyer" of your product, and adjust your messaging accordingly when receiving feedback. For example, a technical audience needs more technical details, while business professionals require fewer details but are more interested in the product's benefits and outcomes.
Sounds good, but in the crypto space, especially for pre-seed companies, defining ideal customer profiles can be tricky. This is because it means considering business outcomes and goals immediately while the product is still evolving. It is challenging to define ideal customer profiles when the product is not yet refined. Therefore, we encourage companies to think about their expected end users, partners, and customers, and then tailor the product launch materials to easily adapt to different customers, conversations, and contexts.
In essence, everything is about explaining in a clear and concise manner to anyone why you are developing your product.
At the same time, it is important to note that regardless of the audience, there should be one consistent piece of information, and that is the mission statement.
It All Starts with a Mission Statement
There has been much discussion on how to write a good mission statement. But at the core of a mission statement is the "why," which succinctly describes the reason for a company's existence, its goals and values, and what sets it apart. This is crucial for positioning in various aspects such as pitch decks, website copy, follow-up emails, sales conversations, and more.
Importantly, mission statements related to go-to-market strategies are not about the "how," or even the "what." They do not need to delve into the specifics of the company's business nor elaborate on detailed plans to achieve goals. Instead, mission statements outline the company's goals and help define its position in the industry. Mission statements also serve the following purposes:
1. Establish a Core Objective for the Company, Rallying the Team
An effective mission statement provides much-needed direction in times of innovation and rapid growth that may veer important goals off course, helping founders stay focused on the idealistic long-term goals set at the company's inception.
Such a core objective is particularly crucial when the market is hot and the team needs to scale. They can integrate the mission statement into interviews, onboarding training, performance evaluations, strategic planning, product roadmap feature prioritization, and marketing campaigns.
For example, Coinbase's long-standing mission has been to "promote economic freedom."
Over the years, Coinbase has gradually introduced centralized exchanges, wallets, an NFT marketplace, layer-two networks, and more. Focusing on any single project may overlook the overarching principles of this mission statement in the communication process. However, it is macro enough to keep the team focused on this principle and then integrate it into decisions about cultural values and product investments, even though some projects appear to go beyond its core business of centralized exchanges.
On the other hand, many startups aim to focus on perfecting a specific product or continuously advancing a particular technology or ecosystem. For example, Blackbird's mission is "to be a loyalty company rewarding people who love restaurants."
With this mission statement, whether it's partners, customers, or investors as the target audience, they can expect that as the product evolves, Blackbird will prioritize and meet the experiential needs of diners and restaurant operators, building loyalty and trust within a specific customer segment.
2. Set the Company Apart from Competitors
The crypto industry is still in its early stages, but it is rapidly evolving in areas such as scalability solutions and proof of stake. Additionally, the open-source nature of the crypto industry has led to many different vendors offering products that may appear very similar on the surface.
Companies in these competitive spaces need to delve deeper into their differentiation in both their product and narrative. It is essential to ensure that these points of differentiation are integrated into the mission statement. Even though a startup may still be exploring its unique selling points, identifying the impact of these differentiators early on may be as crucial as providing a feature diff chart against competitor products.
View this as an early branding opportunity. Focus on what makes you as a founder unique, what makes your team unique, what makes your company unique, and what makes your product vision unique. Even companies offering very similar products may have vastly different styles, and partners and customers, in comparing competitors, will ultimately consider these factors. Why not help them draw these conclusions and enable them to share these insights internally in your own words and advocate for your product?
For example, Towns Co. (a company reinventing local community building on the internet) quickly established a different way of thinking about social networks that no longer emphasizes the vast global community but rather focuses on creating intimate, thoughtfully curated, and more localized gathering spaces.
3. Refocus During Market Shifts
A mission statement is not set in stone. Consumer attitudes change, products pivot, and companies embark on new initiatives. Founders will inevitably encounter situations where the company's growth extends beyond the scope of the mission statement.
While it's crucial for the team to adapt to changes and communicate the company's direction to the market, the mission statement should remain flexible enough to accommodate necessary strategic shifts while still reflecting the unique vision.
Mission statements that embody what keeps the founder up at night and the problems they are solving for users are the ones that will stand out in a noisy market and stand the test of time. This is better than an overemphasis on a declaration that caters to temporary market whims, as the latter will eventually confuse the internal team.
Summing Up
When planning your messaging roadmap, start by drafting your mission statement and then build more specific value propositions on top of that (which we will discuss below). Every company is different, but here are some general guidelines:
Should dos:
Make a distinction between focusing on the long-term vision and competitors, starting from a macro perspective, focusing on fundamental principles and benefits rather than products or features Seek input from co-founders or employees from different functional departments By considering the following questions, use information dissemination as an early branding practice: What changes will my company bring about? As a company, what do we value, and why?
Avoid:
Getting lost in the weeds of product and feature specifications Conveying different mission statements to different audiences Writing a "generic" statement that applies to any company in your industry
Similarly, every company has unique needs and must evaluate its approach. However, once the mission statement is set, you can move on to crafting a value proposition.
Best Practices for Value Proposition
At some point, a startup needs to shift focus from describing the core mission to helping customers understand why they should care about the company's product. If the mission statement explains the "why," the value proposition explains the "what" and "how," based on the mission, outlining the key benefits of the product or service in concise, customer-centric language.
The value proposition is crucial in promoting your product and will appear in your marketing and sales materials, serving the following purposes:
1. Provide contextual information using meaningful, tailored language
Cryptocurrency products often need to define new terms during promotion; it is essential to explain new terms using language and concepts familiar to customers.
Using common industry terms is necessary, with the goal always being to avoid alienating the target audience. For example, an audience familiar with the cryptocurrency space will be familiar with abbreviations like DAO (Decentralized Autonomous Organization). If the value proposition spells it out in full or explains its meaning in detail, they may become disinterested. Conversely, if the value proposition does not explain the overall concept, this may lead to disinterest among a broader audience that still needs introductory guidance.
Determining which terms are appropriate and which are not is actually quite challenging. Many founders believe, "My audience is smart; they will understand." But the reality is that people have different ways of using and understanding jargon. If you are unsure about which terms are viable, do not make subjective judgments. You can always survey your audience or simply take the time to explain and reach a consensus.
For example, Alchemy company states that their Node API allows customers to "connect to top L1 or L2, with their RPC infrastructure processing over 30 billion requests per week, achieving 99.9% uptime." Here, there is no need to explain what L1 or L2 is, or even spell out RPC in full. Their customers, likely developers and engineers in the cryptocurrency space, probably use these terms frequently and do not need further explanation. Furthermore, despite these value propositions involving some details, they still align with the company's mission statement (a complete Web3 developer platform).
2. Focus on the Core: How the Product Makes Customers' Lives Easier
When crafting value propositions for potential customers and partners, be sure to describe the tangible benefits of the collaboration rather than just technical specifications. For example...
· Alchemy: Introducing a reliable enterprise-grade scaling solution, immediately reaching millions of developers
· Base: A secure, low-cost, developer-friendly Ethereum Layer 2 network
· Solana: Leveraging Solana's high throughput, low fees, and minimal environmental impact to meet your enterprise's specific needs
All these value propositions position the product from the perspective of enhancing user efficiency, i.e., how they help customers achieve their goals faster or better than before.
For products targeting a completely new audience, describing how to do things better when something has never been done quite the same way before can be more challenging. In this scenario, founders may wish to compare the product's benefits to adjacent existing fields or even abstract some of the technology to make it more easily understood by the audience.
For consumers, the Blackbird company removed specific crypto jargon, firmly positioning it in the restaurant loyalty space. For example, they also described their points as "universal reward currency" that people can spend at participating restaurants. For diners who have not been exposed to the crypto space, this is much clearer than terms like "restricted-transfer token." Importantly, it taps into the needs of food enthusiasts who love dining out, leveraging their existing behavior rather than requiring them to adopt new ways of behaving.
3. Helping Founders Improve Efficiency
Especially in the early stages of the product lifecycle, having a clear list of value propositions can help founders quickly see how conversations with customers, investors, suppliers, potential hires, and other stakeholders are unfolding. Additionally, the team can adapt this list for sales enablement and marketing, including the company website, social media, GitHub code repositories, sales decks, etc.
Good value propositions will adhere to the core principles mentioned above. They can make products and services more explicit, enhance customer understanding of the company and its developed products, and make early conversations more efficient.
Here are some suggestions for crafting value propositions:
Do's:
Choose language that resonates with the customers
Get feedback on value propositions from customers, employees, and other stakeholders, but ensure the information is relevant to your product
Reuse value propositions in sales enablement and marketing materials
Link benefits to the mission statement, helping internal teams like product, design, and sales
Avoid Doing:
Writing overly broad or lengthy mission statements Overusing jargon, especially to audiences that may not understand it Attempting to cover multiple audiences with one mission statement
Once mission statements are established, you may consider combining them with your value propositions to create an elevator pitch.
Crafting the Perfect Elevator Pitch
You may have heard of the "elevator pitch," which is a brief speech you can use to sell your product or company during a short elevator ride. An elevator pitch succinctly conveys what your company is, why it matters, and how it works. Most founders have practiced extensively for pitches to investors, and some can even recite it from memory, but diving into it here is still necessary as it's vital. It will also be seen throughout your marketing materials.
First off, the earlier you start thinking about your elevator pitch, the better. Founders must continuously assess their ability to bring their product to market and articulate the core points of their company clearly. Their pitch should not only establish a brand for the company but also for the founders, showing who they are, what they are building, and why they are the right person to be building that product.
The elevator pitch can also save time. Founders can deliver their pitch in under a minute, and if delivered well, can discern whether they are speaking to the right person. This is useful for establishing partnerships, making sales, securing funding, and also for receiving immediate feedback. For instance, founders can promptly assess if their pitch is effective and decide if they need to tweak their messaging.
Like the mission statement and value propositions, the elevator pitch is also a reflection of the company's values and culture and will evolve over time. Therefore, it's a good practice to regularly review and update it to ensure alignment among co-founders, employees, and external company supporters.
Lastly, here are some suggestions for crafting the perfect elevator pitch:
Do's:
Practice your pitch at events and conferences within and outside the crypto field Receive feedback from both crypto advocates and critics A/B test your pitch with different targets to refine your delivery
Avoid Doing:
Undermining your pitch effectiveness at the last minute due to lack of preparation Using the exact same pitch for different audiences: Tailor your pitch based on who you are speaking to, e.g., a tech decision-maker versus a business decision-maker
Integrating the Above: The Four Essential Elements of Information Delivery
All of this information should be integrated into several different documents. Here are some foundational pieces of content that each team should have before launching a go-to-market campaign:
· Standard Introduction Paragraph: This introductory paragraph can borrow heavily from the elevator pitch and should be something the founder is ready to deliver verbally and in writing, to be included in the website's "About Us" section and introductory emails.
· One-Pager Overview: A single-page overview of the company, including some potential use cases. Include information from the elevator pitch, mission statement, and value proposition, as well as any pertinent data or proof points such as customer growth metrics, uptime statistics, or key partnerships. This one-pager overview can be sent as pre-reading material before meetings and can also be included in follow-up emails if stakeholders request more information.
· Business Pitch Deck: This is different from an investment or pitch deck and may actually be two to three decks tailored to different ideal customer profiles. Each version of the pitch deck should have information adjusted accordingly and should all include a slide discussing next steps. Note: Founders are often recommended to present this pitch deck live with stakeholders rather than send it in advance, as the conversation will guide the optimal flow of slides and key points on each slide.
· Company Website: Early-stage companies sometimes rely solely on a GitHub repository rather than a website for their go-to-market efforts. The website should combine company information with key assets such as developer documentation and case studies, which can be very helpful in various conversations. While these bullet points and case studies can be shared ad hoc, having all content integrated can facilitate better partner and customer discussions.
With a multitude of ideas flowing and the founder staying focused on iterating the product, determining the direction of information delivery can be challenging. Nevertheless, starting to think about it early is still crucial. Founders who do so will have more valuable materials at their disposal for conversations with investors, customers, and potential partners.
A company with effective information delivery will also have a key advantage in this noisy industry: being able to provide tangible articulations of everything from the product roadmap to hiring, to aspects of work culture and values. Do not skip this step.
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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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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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