From the public speech of Central Bank Governor Pan Gongsheng, looking at the new situation of virtual asset regulation.

Pan Gongsheng, the governor of the People's Bank of China, recently stated at the “2025 Financial Street Forum Annual Meeting” that the current policy documents related to Virtual Money are still effective, and the Central Bank will continue to crack down on the operation and speculation of domestic virtual currencies. On the other hand, Blockchain, as a “trust machine,” is steadily advancing applications in tangible areas such as government affairs, finance, and Supply Chain. Hong Kong is also actively laying out plans under controllable risks, exploring compliant development paths for virtual assets and stablecoins. This article will use Governor Pan's speech as a starting point to sort out the logic behind the central government's strong regulation, the institutional flexibility of the Hong Kong market, and the real development path of blockchain technology in mainland China. It will discuss how to seize the opportunity window for compliant innovation in the context of sustained strict control over virtual currency speculation.

1. Pan Gongsheng's speech: Continue to strengthen the regulatory bottom line of “Virtual Money and Financial Risk Prevention”

On October 27, 2025, the Financial Street Forum Annual Conference opened. Pan Gongsheng, the Governor of the People's Bank of China, attended the opening ceremony and stated that in recent years, virtual money issued by market institutions, especially stablecoins, has been continuously emerging, but overall it is still in the early stages of development. International financial organizations and financial management departments such as central banks generally hold a cautious attitude towards the development of stablecoins. In mid-October, at the IMF/World Bank annual meeting held in Washington, stablecoins and the potential financial risks they may pose became one of the most discussed topics among finance ministers and central bank governors. The prevailing view mainly focuses on the fact that stablecoins, as a form of financial activity, currently cannot effectively meet the basic requirements of customer identity verification, anti-money laundering, etc., amplifying the loopholes in global financial regulation, such as money laundering, illegal cross-border fund transfers, terrorist financing, etc. The atmosphere of market speculation is strong, increasing the vulnerability of the global financial system and impacting the monetary sovereignty of some underdeveloped economies.

Pan Gongsheng further emphasized that since 2017, the People's Bank of China, together with relevant departments, has issued several policy documents to prevent and address risks related to domestic virtual money trading speculation, including the “Announcement on Preventing Risks of Token Issuance Financing” (Announcement 94) and the “Notice on Further Preventing Risks of Virtual Money Trading Speculation” (Notice 924). These policy documents remain valid. In the next step, the People's Bank of China will continue to collaborate with law enforcement agencies to crack down on the operation and speculation of domestic virtual money, maintain economic and financial order, and closely track and dynamically assess the development of overseas stablecoins.

From President Pan's speech, it can be seen that since 2017, the central government's regulatory logic regarding Virtual Money has not fundamentally changed. It still focuses on “preventing risks and maintaining bottom lines” as the main line, continues to adopt “illegalizing business activities” rather than “pre-approval” regulation, and there will be no short-term easing. At the same time, the Central Bank will closely track the development trends of international stablecoins and dynamically assess their potential spillover effects on domestic financial order.

II. Relatively Stable Hong Kong Space: A Testing Ground for Compliance Innovation

Unlike the mainland's tone of “completely banning virtual currency transactions,” Hong Kong has consistently promoted the regulatory pilot of virtual assets and blockchain applications with a prudent and inclusive attitude under the framework of “one country, two systems,” aiming to build a clear and comprehensive regulatory framework for virtual assets. The regulation of virtual assets in Hong Kong is a gradual process, with its core objective being to prevent financial risks while consolidating Hong Kong's status as an international financial center.

In 2017, the Hong Kong Securities and Futures Commission first indicated that some Initial Coin Offerings (ICOs) may constitute securities under the Securities and Futures Ordinance and require regulation, laying the foundation for the classification of Virtual Money assets. In October 2022, the Hong Kong Financial Secretary released the “Policy Declaration on the Development of Virtual Assets in Hong Kong,” marking the beginning of systematic government efforts to promote the development of Virtual Money assets.

A key milestone was reached on June 1, 2023, when the “Guidelines for Operators of Virtual Asset Trading Platforms” officially came into effect, establishing a mandatory licensing system for virtual asset trading platforms. Subsequently, in June 2025, the Hong Kong SAR government issued the “Hong Kong Digital Asset Development Policy Declaration 2.0,” proposing the “LEAP” framework, which further clarified the development directions such as optimizing legal and regulatory frameworks and expanding the variety of tokenized products.

On August 1, 2025, the Hong Kong “Stablecoin Ordinance” will officially come into effect, marking the implementation of the world's first comprehensive regulatory framework for fiat stablecoins. The ordinance aims to regulate the issuance activities of fiat stablecoins, requiring relevant parties to apply for licenses from the financial management commissioner, and implement regulations such as reserve asset segregation, stability mechanism maintenance, and face value redemption.

On November 3, 2025, the Hong Kong Securities and Futures Commission issued two important circulars on the same day, namely “Circular on Expanding Virtual Money Trading Platform Products and Services” and “Circular on Shared Liquidity of Virtual Money Trading Platforms.” These two documents not only represent an important evolution of Hong Kong's virtual asset regulatory framework but also serve as strategic measures for Hong Kong to seize a regulatory advantage in the global digital asset competitive landscape and promote the sound development of the industry.

In terms of infrastructure, on October 22, 2025, the National Information Center's “Spark·Chain Network” international super node officially landed in Hong Kong. This is the first time a national-level digital infrastructure has established a node overseas, which is conducive to the cross-border flow of trusted data and compliance on-chain identity verification (DID) for financial institutions. The establishment of this node signifies that Hong Kong will play a key role in the circulation of trusted data on the blockchain and the construction of standards for cross-border digital assets. As a national-level blockchain infrastructure, Spark·Chain Network explores the deep integration of blockchain technology with the national digital economy strategy through a system architecture of “chain network interconnection, controllable data, and trustworthy identity.”

It can be seen that Hong Kong is regarded as a “window” for the development of virtual assets, not because of its loose regulations, but because it has established a more refined and controllable regulatory system. At the same time, the national-level blockchain infrastructure landing in Hong Kong also provides strong support. In the future, the policy flexibility of Hong Kong under the premise of controllable risks will continue to provide institutional guarantees for the development of blockchain technology, digital financial innovation, and international capital flows, becoming an important bridge between the domestic and international markets.

III. Compliance Exploration in the Mainland: From “Public Chain” to “Trusted Data Space”

Although virtual money trading and ICO financing are banned domestically, virtual money is not equivalent to blockchain. The central authorities' refusal to legalize virtual money is due to financial security issues such as preventing capital flight, money laundering, cross-border illegal transfers, and speculative bubbles that could harm residents' asset safety, rather than the technological issues related to blockchain, which virtual money relies on. It is important to note that the central authorities are banning “coins”, not “chains”, and allowing the development of “non-coin blockchain” and “trustworthy data systems”. In fact, research and application of blockchain underlying technology in mainland China have never ceased. In recent years, policies have continuously emphasized the need to “develop the digital economy and build a trustworthy data element market”, with various local governments and research institutions actively promoting innovative projects centered around public chain technology and trustworthy data circulation.

(1) Exploration of Public Chains and National Development Strategy

The 14th Five-Year Plan outlines the inclusion of blockchain in the national development strategy for the first time, placing it in the chapter “Accelerating Digital Development and Building a Digital China.” According to the “Guiding Opinions on Accelerating the Application and Industrial Development of Blockchain Technology” issued by the Ministry of Industry and Information Technology and the Central Cyberspace Administration, it is clear that by 2030, “blockchain will become an important support for building a strong manufacturing and cyber power, developing the digital economy, and modernizing the national governance system and governance capability.”

Firstly, it should be pointed out that, unlike the typical international public chains characterized by “coin” and “decentralization”, mainland China emphasizes “no coin”, “controllable”, and “compliant” public chains. It is not positioned as a “value speculation tool”, but rather as “digital infrastructure” and a “trusted data circulation base”. In mainland China, the development of “public chains” is highly related to strategies such as “trusted data space”, “digital economy”, and “new infrastructure”, and is one of the important directions for promoting technological innovation and the construction of the digital economy.

Currently, research on public chains in China is mainly focused on self-controllable open-source ecosystems, which design excludes the issuance and mining mechanisms of cryptocurrencies, emphasizing identity credibility, permission management, and multi-party collaboration. At present, the main domestic public chains are as follows:

(2) Trusted Data Space: New Application Scenarios of Blockchain

The “Trusted Data Space” is an important concept in the construction of Digital China over the past two years. It does not refer to a “chain,” but rather a data governance system. The Trusted Data Space aims to achieve data ownership, circulation, traceability, and auditability through technologies such as Blockchain and privacy computing. In simple terms, it addresses the issue of “how different institutions can share, circulate, use data, and obtain benefits while ensuring privacy and security.”

In this system, Blockchain plays the role of ensuring data authenticity, traceability, and tamper-proofing, while privacy computing technology ensures the security and compliance of data during circulation, ensuring that “data is available but not visible.” The identity authentication and authorization system controls who can access and use the data. For example, banks, hospitals, and tax offices can circulate data in a “trusted data space” without disclosing personal privacy; each access is recorded on the Blockchain, auditable, and traceable. This mechanism has been implemented in fields such as finance, government affairs, healthcare, and energy, becoming an important direction for domestic Blockchain innovation.

Through the collaborative development of public chains and trusted data spaces, China is forming a digital infrastructure path that is “technology-neutral, functionally controllable, and compliance-first,” which is completely different from the speculation and hype of Virtual Money.

Lawyers Have Something to Say

From a regulatory perspective, the focus of this speech is not on “new regulations”, but on “clarifying boundaries”. However, this does not mean that the development space for Blockchain and related digital assets is closed off. On the contrary, the central government has created a controllable experimental zone and technological support through the “institutional innovation window of Hong Kong” and the “development of the technical and data system in the Mainland”, enabling the industry to explore more mature business models within a compliant framework. For enterprises, the key is not in “whether to do it”, but in “how to do it”; the opportunity window for compliance innovation always exists. In the future, achieving efficient integration of digital finance and the real economy under the premise of controllable risks will be a topic that the regulatory authorities and the industry will face together.