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In 18 days, Musk terminated hundreds of contracts and took six Gen Z Americans to reshape the future United States
On the morning of February 3rd, Washington time, the headquarters of the United States Agency for International Development (USAID) was tightly closed, and the once bustling office area fell into silence. Just the night before, officials from Elon Musk's Department of Government Efficiency (DOGE) officially took over this over 60-year-old international aid agency and announced plans for a complete shutdown. USAID staff received an email informing them that, except for essential personnel, all other staff would transition to remote work. At the same time, the USAID website was taken offline, official social media accounts were deleted, and the agency's operations came to a standstill.
Musk stated on social media that he had discussed the matter with President Trump and had been granted full authority to shut down USAID. He claimed that the agency was a "far-left criminal organization" that needed to be completely dissolved.
Musk collaborated with Trump to establish the "Department of Government Efficiency" (DOGE) under the pretext of "streamlining government" to drive radical reforms. Its core goals focused on reducing government spending, digitizing bureaucratic systems, and replacing manpower decisions with algorithms. This high-profile closure of USAID has also exposed the true face of the previously mysterious DOGE team members, and this may only be the beginning as the power structure of the U.S. federal government is rapidly being reshaped.
Team Composition: Average Age 22, the "Tech Six"
The DOGE team consists of 6 technical elites aged 19-25, all without government experience but closely linked to Musk's companies (such as SpaceX, Neuralink) or Silicon Valley capital (such as Peter Thiel).
Image Source Internet
Gavin Krieg (25): Krieg graduated from the University of California, Berkeley with a major in Electrical Engineering and Computer Science and previously served as a Senior Software Engineer at the U.S. AI data analysis company Databricks, specializing in artificial intelligence and big data analysis. Krieg's task is to draft executive orders and ensure their rapid implementation within the government. The email sent to all USAID staff on Monday instructing them not to report to headquarters came directly from him. He also directly drafted the funding review order for the U.S. Treasury Department, participated in the OPM's large-scale layoff plan, and was responsible for establishing the "rehiring standards" for civil servants, requiring future government employees to be approved by DOGE before being hired.
Luke Farihto (23): Farihto dropped out of the University of Nebraska, Lincoln and later worked for Silicon Valley entrepreneur Nat Friedman behind GitHub. He interned at SpaceX, writing software for pumps, valves, and other components that help fuel rockets. Farihto is currently listed as the "Executive Engineer" in the Office of the Secretary of the U.S. Department of Health and Human Services (HHS), personally overseeing USAID's digital lockdown operation. The next target is set on the systems of the Centers for Medicare and Medicaid Services responsible for contracts.
Edward Corristine (19 years old): Corristine is the youngest member, having just graduated from high school and currently studying Mechanical Engineering and Physics at Northeastern University in Boston. Last summer, he worked for three months at Elon Musk's brain-machine interface company, Neuralink, although his specific role is still unclear. Corristine once used a non-governmental Gmail account to join a call with U.S. General Services Administration employees, asking them to review their own code and prove the validity of their work, causing dissatisfaction among federal employees.
Akash Bova (21 years old): Bova hails from the University of California, Berkeley, and was a Investment Engineering Intern at Bridgewater Associates. He also interned at Meta and Palantir, a U.S. software services company founded by MAGA supporter Peter Thiel, specializing in artificial intelligence, data analysis, and financial modeling. He is responsible for designing algorithms to monitor government fund flows, and his "Real-Time Fiscal Expenditure Monitoring System" allows the real-time freezing of federal "inefficient spending" without congressional oversight.
Ethan Shotland (22 years old): Shotland is a senior studying Computer Science at Harvard University and is the only team member with experience in AI entrepreneurship. His AI company, Energize AI, received a $100,000 grant from OpenAI and was the runner-up in a hackathon hosted by Musk's AI company, xAI. Shotland is in charge of the DOGE AI Government Plan, which aims to use algorithms to replace the government's traditional human decision-making processes, automating most administrative approvals, budget assessments, and even congressional reporting.
Gautier Cole Kilian (24 years old): Kilian breached the Treasury Department's security system to gain access to the payment network. A graduate of McGill University, he has strong abilities in financial data processing and previously worked as an engineer at Jump Trading, a company specializing in high-frequency financial trading and algorithms. Kilian's main task is to help the DOGE team breach the Treasury Department's security defenses to access the government's payment network, bypassing security checks to directly read millions of transaction records. Kilian is also one of the few young people who have been granted high-level access to the White House, and Musk has immense trust in him.
Through the collective efforts of these six individuals, DOGE completed an administrative restructuring of the U.S. government in just two weeks, a feat that had not been achieved in decades. Their actions were extremely efficient, with each person handling multiple tasks and working around the clock. Some team members worked 24/7 without leaving their posts, sleeping in the office when tired. They conducted a comprehensive audit of the seemingly bottomless pit of the U.S. federal agencies. Musk held them in high regard, praising them as the "future of the new government" on social media.
The White House Launches "Silicon Valley-Style Blitzkrieg"
Since Donald Trump took office on January 20th, the Musk-led Department of Government Efficiency (DOGE) has embarked on a lightning-fast dismantling process. According to a DOGE official tweet, the following institutions, projects, and funds have been shut down as of now:
January 20th: Dissolution of the Chief Diversity Officer Executive Committee (CDOEC);
January 25th: Cancellation of approximately $4.2 billion of existing/upcoming contracts;
January 27th: The Departments of Labor, Transportation, Agriculture, Commerce, Health and Human Services, and the Treasury canceled 16 DEIA contracts, saving $145 million;
January 28th: The General Services Administration (GSA) terminated three nearly vacant office space leases, closed 17 DEIA websites, saving $1.6 million;
January 29th: Cancellation of a $45 million DEI scholarship grant to Myanmar;
(As of January 29, 2025, 26 departments, including the Department of Education and GSA, have terminated 85 DEIA-related contracts totaling approximately $1 billion;)
February 3rd: The number of underutilized building lease terminations increased to 22, with the savings increasing from $1.6 million to $44.6 million;
February 3rd: Closure of the United States Agency for International Development (USAID);
February 4th: 6 agencies terminated 36 contracts, saving approximately $165 million, including the Department of Homeland Security's "Humanitarian Investigations and Climate Support Services" contract;
February 5th: Termination of 12 consulting contracts (at GSA and the Department of Education), saving approximately $30 million;
February 6th: The Social Security Administration terminated its "Gender X Initiative Tagging" contract, saving over $1 million; NASA canceled its Politico subscription, saving $500,000; 78 contracts in the DEI, distressed assets, media, and consulting categories were terminated, with a total savings of approximately $110 million;
February 8th: It was announced that in the past 48 hours, the Department of Health and Human Services terminated 62 contracts worth $182 million; the Department of Education terminated three DEI training grants totaling $15 million.
Under Trump's directive, the Musk team is systematically taking over U.S. federal agencies through unconventional means, and the most controversial USAID shutdown has long been foreshadowed. In the past half month, over 70% of USAID's departments have been successively shut down, with over a thousand regular employees and contractors being forcibly laid off or placed on indefinite leave. Its digital portal is completely paralyzed, social media updates have stopped, and even the institutional headquarters' nameplates have been quietly removed.
Image Source: USAID Official Website, Statement: All USAID direct-hire employees will be on administrative leave starting at 11:59 PM Eastern Time on Friday, February 7
This systemic takeover is spreading at an astonishing pace. Under Musk's leadership, the DOGE team has not only swiftly taken control of the USAID command center but has also simultaneously infiltrated key departments such as the Treasury, Office of Personnel Management (OPM), General Services Administration (GSA), among others. Several chief security officers, chief financial officers, and top executives of key departments have been summarily dismissed, and numerous senior civil servants have been sidelined. In stark contrast, hundreds of tech newcomers with mysterious ties to Musk, lacking government work experience, are assuming key government positions through special channels, bypassing regular security vetting to directly access classified databases.
Of particular controversy is DOGE's penetration of the financial payment hub. This hub, which oversees the distribution of social security benefits, healthcare subsidies, government salaries, and corporate grants, has traditionally been run by career finance officials. However, the DOGE team has recently broken through traditional constraints by not only gaining real-time monitoring access to the financial payment system but also initiating the establishment of a "non-essential expenditure" screening mechanism, preparing to implement intelligent cutbacks on federal welfare programs.
Musk claimed on social media that there are significant "illegitimate payments" in the federal government's daily expenditures, including foreign aid, social welfare, academic research funding, etc., and DOGE's goal is to cut $4 billion in daily expenditures. On February 6, DOGE announced the termination of 78 contracts in DEI, distressed assets, media, and consulting categories, including a contract for "Mauritania Islamic Republic Groundwater Exploration and Assessment," resulting in approximately $110 million in total savings.
Of course, there are also some changes that are somewhat comical, especially in gender issues that are generally incomprehensible to the Chinese. On February 6, DOGE's official Twitter account announced, "The Social Security Administration has terminated the contract for the 'Gender X Initiative Marker' and removed all gender ideology-related content from public-facing applications. This has saved over $1 million and is in line with the President's executive order" (see image below).
In the image, the changes involve the URL modification of the Social Security online application page to "/sex" instead of "/gender." While the wording of the application form itself has not changed, still asking, "What is your gender?" and providing "Male" and "Female" options, the official shift in terminology from "gender" to "biological sex" does not acknowledge gender identity. This aligns with an executive order signed by Trump on January 20, 2025, titled "Safeguarding Women from Gender Ideology Extremism and Restoring Biological Truth in the Federal Government." This order defines gender as binary male and female, requires federal agencies to use "sex" instead of "gender identity," cease funding gender affirmation care, and prohibit transgender individuals from using facilities according to their gender identity in federally funded single-sex facilities.
Image Source: NEW YORK POST, Trump stated that he only supports two genders: male and female
As DOGE gradually infiltrates the core of government agencies, the balance of power is shifting. In internal communications, civil servants have been informed that they must accept "government efficiency reforms," or they may face dismissal or be reassigned to peripheral positions. Some Treasury Department employees have even received warning emails hinting that their positions may be eliminated. Meanwhile, Musk has ridiculed government workers on social media, calling them "lazy," and encouraging them to resign voluntarily, suggesting that only those "willing to adapt to the new system" will be able to remain in their roles.
Musk's plan goes far beyond cost-cutting and cleansing officials. His goal is to establish a new government model—a governance system led by tech entrepreneurs, with executive decisions assisted by algorithms and artificial intelligence. He has appointed a team composed of former Tesla, xAI, and SpaceX employees to begin developing government management artificial intelligence to automatically review budgets, approve projects, and analyze policy implementation effectiveness in the future.
In the next phase of action, DOGE is considering dissolving the U.S. Department of Education through executive means. Officials have been discussing an executive order that would revoke all functions of the U.S. Department of Education that are not explicitly included in regulations or transfer some functions to other departments. It is worth noting that Trump mentioned last August in an interview with Musk that if he is re-elected as President of the United States, he will shut down the U.S. Department of Education.
A Power Crisis Dividing the American Political Scene?
As DOGE's influence sweeps through the political scene like a storm, the voices of opponents have also grown louder.
The sudden closure of USAID has not only caused a stir domestically in the United States but has also raised widespread concerns in the international community. This agency oversees approximately $40 billion in funding annually, involving over 100 countries globally, covering various areas such as humanitarian aid, development support, and health projects. Its abrupt shutdown has left many countries and aid organizations without assistance, with some emergency aid projects even facing the risk of interruption.
Meanwhile, Secretary of the Treasury Scott Bennett, upon taking office, handed over access to payment system data to Musk and his DOGE team. This move has sparked widespread controversy, with critics pointing out that it could lead to the exposure of sensitive information of tens of millions of citizens and businesses, jeopardizing the financial security of Americans, and even threatening the stability of national infrastructure and personal privacy.
Without proper review or authorization, DOGE has taken unauthorized control of the Office of Personnel Management (OPM) and the General Services Administration (GSA). The legitimacy and qualifications of its series of personnel appointments have quickly raised external doubts and criticisms. Generally, the formulation of federal policies requires layers of approval within government agencies, ultimately decided by Cabinet members in conjunction with the President. However, Musk and his core team bypassed this process, forming an informal decision-making group dominated by tech elites, entrepreneurs, and young engineers.
In response, Democratic Senator Chuck Schumer announced plans to collaborate with House Democratic leader Hakeem Jeffries to introduce legislation to counter DOGE's "unlawful intervention." Meanwhile, multiple lawsuits against Musk have been filed in federal courts, with allegations including unauthorized access to confidential information by DOGE officials, violations of government procurement regulations, and misuse of executive orders to cut federal spending.
Image Source: TVBS NEWS, Democrats Oppose Musk's Reform
On February 6th, local time, the Musk-led Department of Government Efficiency (DOGE) faced a setback as federal judge Colleen Kollar-Kotelly issued a temporary restraining order prohibiting the Treasury Department from providing data from its payment system to external parties. As a result, Musk himself will be unable to review data retrieved from the payment system.
To add to the troubles, just hours after the judge's ruling, a 25-year-old DOGE programmer named Marko Elez abruptly resigned after it was discovered that he had posted racist comments on his dormant social media account.
Behind Musk's strong actions lies the staunch support and trust of President Trump. In the White House, Musk not only has a separate office but also frequents high-level official meetings, with Trump publicly expressing "full confidence in Musk's decisions" multiple times. In terms of government operations, Musk attempts to discard the traditional bureaucratic system in favor of a high-efficiency model similar to Silicon Valley companies. Many senior government officials have expressed concerns, believing that this reform could lead to an excessive concentration of power in private capital, undermining government transparency and accountability mechanisms. However, under Trump's protection, despite facing some obstacles, Musk's reform efforts continue unabated.
Bold reforms are always a bloodless war, capable of either establishing a disruptive global government management model or becoming a casualty of power struggles. If the opposition from the Democratic Party gradually strengthens or if a robust opposing force emerges within the judicial system, DOGE's reform may be slowed down. However, judging by the current efficiency, Musk's actions are far faster than the unwieldy traditional administrative system. An efficiency-first, tech-driven "corporate-style" government is taking shape. Is the adventure led by Musk and six young individuals a stroke of genius innovation or a dangerous game? The answer to this question can only be verified with time.
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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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