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 Conference" that the current policy documents related to virtual currencies are still in effect, and the Central Bank will continue to crack down on the operation and speculation of virtual currencies within the country.

On the other hand, blockchain, as a "trust machine", is steadily advancing its applications in tangible areas such as government affairs, finance, and supply chains. Hong Kong is also actively planning under the premise of controllable risks, exploring compliant development paths for virtual assets and stablecoins. This article will take President Pan's speech as a starting point to analyze the logic behind the Central Bank's strong regulation, the institutional flexibility of the Hong Kong market, and the real development path of blockchain technology in the mainland, discussing how to seize the window of opportunity for compliant innovation in the context of ongoing strict control over virtual currency speculation.

1. Speech by Pan Gongsheng: Continue to strengthen the regulatory bottom line for "virtual currency and financial risk prevention and control". On October 27, 2025, the Financial Street Forum Annual Conference opened. Pan Gongsheng, Governor of the People's Bank of China, attended the opening ceremony and stated that in recent years, virtual currencies issued by market institutions, especially stablecoins, have been emerging continuously, but overall, they are still in the early stages of development. International financial organizations and financial management departments such as central banks generally maintain a cautious attitude towards the development of stablecoins.

In mid-October, at the IMF/World Bank annual meeting held in Washington, stablecoins and the financial risks they may pose became one of the most discussed topics among finance ministers and Central Bank governors. The prevailing view focuses on the fact that stablecoins, as a financial activity, currently cannot effectively meet the basic requirements for customer identity verification, anti-money laundering, and other aspects, which amplifies the loopholes in global financial regulation, such as money laundering, illegal cross-border fund transfers, and terrorist financing. The atmosphere of market speculation is intense, 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, in conjunction with relevant departments, has issued several policy documents to prevent and address risks related to domestic virtual currency trading speculation, including the "Announcement on Preventing Risks of Token Issuance Financing" (Announcement 94) and the "Notice on Further Preventing Risks of Virtual Currency Trading Speculation" (Notice 924). These policy documents remain in effect. Moving forward, the People's Bank, together with law enforcement agencies, will continue to crack down on the operation and speculation of virtual currencies domestically, maintain economic and financial order, and closely monitor and dynamically assess the development of overseas stablecoins.

From President Pan's speech, it can be seen that since 2017, the Central Bank's regulatory logic regarding virtual currencies has fundamentally remained unchanged, still focusing on "preventing risks and maintaining bottom lines". It continues to adopt a regulation approach of "criminalizing business activities" rather than "pre-approval" regulation, and there will be no relaxation in the short term. At the same time, the Central Bank will closely track international stablecoin development trends and dynamically assess their potential spillover effects on domestic financial order.

2. Relatively Stable Hong Kong Space: Unlike the tone of the mainland's "comprehensive ban on virtual currency trading", Hong Kong has always promoted regulatory pilots for 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 the core objective of preventing 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) might constitute securities under the Securities and Futures Ordinance, laying the foundation for the regulation of virtual assets. In October 2022, the Hong Kong Financial Secretary released a policy declaration on the development of virtual assets in Hong Kong, marking the beginning of a systematic push by the government to promote virtual asset development. A key milestone was on June 1, 2023, when the "Guidelines for Virtual Asset Trading Platform Operators" officially came into effect, establishing a mandatory licensing system for virtual asset trading platforms.

Subsequently, the Hong Kong SAR government released the "Hong Kong Digital Asset Development Policy Declaration 2.0" in June 2025, proposing the "LEAP" framework, which further clarifies the development directions of optimizing legal and regulatory aspects, and expanding the variety of tokenized products. On August 1, 2025, Hong Kong's "Stablecoin Ordinance" officially came into effect, marking the implementation of the world's first comprehensive regulatory framework for fiat-backed stablecoins. The ordinance aims to regulate the issuance activities of fiat-backed stablecoins, requiring relevant parties to apply for a license from the Financial Management Commissioner, and implementing provisions such as reserve asset segregation, maintenance of stability mechanisms, 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 Asset Trading Platform Products and Services" and "Circular on Shared Liquidity for Virtual Asset 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 regulatory advantages in the global digital asset competitive landscape and promote the sound development of the industry.

On the infrastructure front, on October 22, 2025, the National Information Center's "Spark · Chain Network" international super node officially landed in Hong Kong. This marks the first time a national-level digital infrastructure has established a node overseas, which is beneficial for the cross-border circulation of trusted data and compliant on-chain identity authentication (DID) for financial institutions. The establishment of this node means 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.

Xinghuo·Chain Network, as a national-level blockchain infrastructure, explores the deep integration of blockchain technology with the national digital economy strategy through a framework 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 lenient 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 flow, becoming an important bridge between the mainland and international markets.

3. Exploring Compliance in the Mainland: From "Public Chains" to "Trusted Data Spaces" Although virtual currency trading and ICO financing are prohibited within the country, virtual currency is not equivalent to blockchain. The central government does not legalize virtual currency to prevent capital outflow, money laundering, and cross-border illegal transfers, as well as to avert speculative bubbles that could harm the asset safety of residents, rather than due to technical issues related to the blockchain technology that virtual currency relies on.

It is important to note that what the Central Bank prohibits is "currency", not "chain". It allows for the development of "non-currency blockchains" and "trusted data systems". In fact, research and application of blockchain underlying technology in the mainland has never ceased. In recent years, the policy level has continuously emphasized the need to "develop the digital economy and build a trusted data factor market". Many local governments and research institutions are actively promoting innovative projects centered around public chain technology and trusted data circulation.

(1) The exploration of public chains and the 14th Five-Year Plan for National Development Strategy has for the first time included blockchain in the national development strategy, listing it under 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 Cybersecurity and Communications Commission, it is clearly stated that by 2030, "blockchain will become an important support for building a strong manufacturing country and a strong cyber power, developing the digital economy, and realizing the modernization of the national governance system and governance capacity.

"Firstly, it should be pointed out that, unlike the international typical "coin" and "decentralized" public chains, the mainland of China emphasizes "non-coin", "controllable", and "compliant" public chains. It is not positioned as a "value speculation tool" but is instead identified as "digital infrastructure" and "trusted data circulation base". In the mainland of China, the development of "public chains" is highly related to strategies such as "trusted data space", "digital economy", and "new infrastructure", making it one of the important directions for promoting technological innovation and digital economy construction."

Currently, research on public chains in China mainly focuses on an independent and controllable open-source ecosystem, excluding cryptocurrency issuance and mining mechanisms in design, and emphasizing identity trust, permission management, and multi-party collaboration. At present, the main domestic public chains are as follows:

(2) Trusted Data Space: The new application scenario of blockchain, "Trusted Data Space," is an important concept in the construction of Digital China in recent 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 gain benefits while ensuring privacy and security."

In this system, blockchain plays the role of ensuring the authenticity, traceability, and tamper-proof nature of data, while privacy computing technology ensures the security and compliance of data during circulation, guaranteeing that "data is available but not visible," and the identity authentication and authorization system controls who can access and use the data.

For example: Data can circulate between banks, hospitals, and tax authorities in a "trusted data space", but personal privacy will not be disclosed; each access is recorded on the blockchain, which is auditable and traceable. This mechanism has been implemented in various fields such as finance, government affairs, healthcare, and energy, becoming an important direction for blockchain innovation in the region. Through the collaborative development of public chains and trusted data spaces, China is forming a digital infrastructure path that is "technologically neutral, functionally controllable, and compliance-oriented", which is completely different from the speculation and hype of virtual currencies.

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 asset sectors is closed off. On the contrary, the Central Bank has created a controllable experimental zone and technological support through "Hong Kong's system innovation window" and "the mainland's technology and data system construction," allowing the industry to explore more mature business models on a compliant track in the future.

For enterprises, the key is not whether to "do it or not," but "how to do it." The opportunity window for compliant innovation always exists. In the future, how to achieve 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.