Financial regulatory authorities are alert to the risks of virtual money, while China's blockchain technology and virtual money development are diverging.

Recently, financial regulatory authorities in many parts of the country have issued announcements, reminding the public to be wary of illegal financial activities disguised under the banner of "stablecoins" and other terms. Although the concept of stablecoins has existed for a long time, it has remained limited to a small scope. With the United States passing related legislation and news of domestic large enterprises intending to issue stablecoins in Hong Kong, people in the mainland are gradually beginning to understand stablecoins and other Virtual Money.

Against this backdrop, some self-media accounts have transformed into web3 communicators, frequently producing content related to stablecoins and other Virtual Money. In the context of limited traditional investment channels, emerging things are often the most attractive. However, the Virtual Money field is prone to issues, and previously cracked down funding schemes have begun to resurface. This naturally raised the awareness of financial regulatory authorities.

In-depth analysis reveals that the strict attitude of mainland regulatory authorities towards Virtual Money is not only due to its potential to foster illegal activities, but the more fundamental reason is the lack of a conducive environment for Virtual Money to thrive in mainland China. In short, China supports the development of Blockchain technology, but does not allow the development of Virtual Money.

The statements from financial regulatory authorities in various regions reflect this position. Relevant departments in Shenzhen pointed out that the market is paying widespread attention to digital currencies represented by stablecoins, while also warning against some institutions attracting funds and inducing speculation under the guise of "financial innovation". Zhejiang Province referred to stablecoins and the like as "concepts", implying that they do not comply with domestic financial policies. Other places such as Suzhou, Beijing, Gansu, Chongqing, and Ningxia have also issued similar notices.

This nationwide warning reminds people of the relevant regulatory policies in 2017 and 2021. In fact, since September 15, 2021, the strict regulatory policies on virtual money in mainland China have remained unchanged. Despite the recent surge in the prices of Bitcoin and Ethereum, the attitude of the judicial authorities and financial regulatory bodies towards virtual money remains strict.

As early as 2013, after the central bank and other departments issued a notice to prevent the risks of Bitcoin, the mainland's crypto field diverged into two paths: "Chain Circle" and "Coin Circle." "Chain Circle" advocates focusing on the development of Blockchain technology, mainly involving consortium chains and public chains, with participants mostly being technical personnel; "Coin Circle," on the other hand, involves various businesses related to Virtual Money, including investment, trading, issuance, and more.

On September 15, 2021, mainland China clearly defined the cryptocurrency sector as illegal financial activity and implemented strict crackdowns. Since then, the competition between the blockchain and cryptocurrency sectors has come to a conclusion: China supports the development of Blockchain technology but strictly prohibits Virtual Money-related businesses. Although there is no explicit ban on personal investment in Virtual Money, the law does not recognize its validity and does not provide related protection.

For those who understand China's strong centralized social governance model, the logic of "as long as it's Blockchain, not Virtual Money" is not difficult to comprehend. Although from a technical perspective, Blockchain technology is merely one of the conditions for the birth of Bitcoin, the token incentive strategy is crucial for the development of public chains. However, this is the reality; those truly engaged in web3 construction who cannot adapt can only choose to develop overseas.