Introduction
Recently, many friends have been asking: What exactly has been upgraded in Digital RMB 2.0? Will it affect the crypto assets we hold?
However, if we only focus on Digital RMB, we may easily overlook another more critical clue—on November 28, the regulatory authorities made a clear statement on stablecoins, which is simultaneously reshaping the legal boundaries of the entire digital currency sector.
These two events are not independent of each other. When viewed under the same regulatory logic, we can see: one side is clarifying what can no longer be done, while the other is telling the market which direction is permitted.
The purpose of this article is not to simply judge whether it is a “positive or negative development”, but to explain three key points by combining the November 28 meeting and the launch of Digital RMB 2.0:
- To what extent has stablecoin regulation in Mainland China been “implemented”?
- What financial logic has truly been changed by Digital RMB 2.0?
- After the red line for illegal financial activities has been redefined, what paths can Web3 practitioners choose?
"Cold and Hot" at the End of 2025
At the end of 2025, China’s Web3 industry stands at a crucial juncture. If we say that Hong Kong, to the south, is steadily advancing institutional experiments on stablecoins within a legal framework, what is happening in Mainland China is not exploration, but a reconfirmation of boundaries. Within just one month, practitioners have clearly felt that a more definite and rigid regulatory paradigm is being put in place.
On one hand, industry expectations have cooled rapidly: On November 28, the People’s Bank of China (PBOC) and other departments held a coordination mechanism meeting on anti-money laundering risks and beneficial owner management, and made a clear regulatory classification of “stablecoins”. Previously, the market had hoped that “Hong Kong’s legislation might force adjustments to Mainland policies”, but after the red line of “illegal financial activities” was re-emphasized, this optimistic judgment was quickly revised—the regulatory stance has not loosened, but has become even clearer.
On the other hand, policy signals have heated up simultaneously: At the end of December, Digital RMB 2.0 was officially unveiled. According to currently disclosed information, Digital RMB in this new phase has evolved from a simple “digital cash” form to a “digital deposit currency” that supports interest accrual, complex smart contracts, and has the liability attribute of commercial banks. Its institutional positioning and application boundaries have been significantly expanded.
Amid the coexistence of “cold” and “hot”, the regulatory intent has shifted from implicit to explicit. This is not an accidental combination of policies, but a well-organized “cage replacement”—by continuously clearing out stablecoins owned by non-public entities, it makes room for a clear and controllable market space for the officially led digital currency system.
"Old Wine in New Bottles": The Logic of Regulation
When interpreting the regulations announced on November 28, 2025, many people tried to find new regulatory rules. However, we believe this is just a reaffirmation of the “September 24 Notice” issued in 2021.
The "Missing Splash": The Market Has Long Developed Immunity
The most intuitive indicator is: When the “September 24 Notice” was released in 2021, Bitcoin (BTC) plummeted sharply, and the industry was in a state of despair; yet after the 2025 meeting, the market did not even stir a ripple. This sense of apathy in the market stems from the repetition of logic.
As early as four years ago, the regulatory authorities had clearly classified “Tether (USDT)” as an illegal virtual currency. Even if this meeting highlighted the so-called key point that “stablecoins also belong to virtual currencies”, there is no substantive new content in terms of legal principles.
The "Comeback" of Judicial Decisions: From Lenience Back to Rigor
The real “killer move” of this meeting lies not in “classification”, but in the mandatory adjustment of judicial trends. We need to observe a subtle judicial change:
- •2021-2022: All crypto-related contracts were deemed invalid, with risks borne by the parties involved, and courts basically refused to provide remedies.
- •Early 2023-2025: Judges began to understand Web3 and no longer simply rejected everything on the grounds of “public order and good customs”. For civil disputes involving the purchase of crypto assets with real money, some courts began to rule on “proportionate return of legal tender”.
- •After the end of 2025 (post-November 28): A “cold winter” has returned. This meeting released a clear signal, requiring judicial adjudication to align with administrative supervision—for Web3 civil disputes, an invalid contract remains invalid, and risks must be borne by the parties involved.
The Real Anchor of Regulation: Blocking the "Underground Pipeline" of Foreign Exchange
Why did the administrative authorities reaffirm the “old rules” at this time? Because stablecoins have touched the most sensitive nerve—foreign exchange control. Today, USDT and USDC have evolved from Web3 trading tools into a “parallel highway” for large-scale cross-border fund transfers. From children’s overseas tuition fees to complex money laundering chains, stablecoins have essentially undermined the annual $50,000 foreign exchange quota per person.
The November 28 meeting was essentially not about discussing technology, but about addressing foreign exchange issues. The reason why the regulatory authorities reaffirmed the rules is that they found that even under strict prevention and control, due to the real-time settlement nature of stablecoins, there are still loopholes in the foreign exchange control “gate”.
Prudent Risks and Outlook
It should be noted that under the current regulatory thinking, security is given absolute priority. This helps to quickly control risks, but it may also bring a practical impact: in the short term, there will be a certain degree of disconnection between the Mainland’s financial system and the globally advancing programmable financial system, thereby reducing the space for institutional exploration in the public chain environment.
Digital RMB: From Exploration in 1.0 to "Logical Reconstruction" in 2.0
Why was it necessary to classify stablecoins at this specific time?
Because Digital RMB 2.0 undertakes the mission of “incorporating technological logic into the sovereign framework”.
Digital RMB 1.0 Era
- •From the user’s perspective: With the attribute of M0 (cash), it did not accrue interest, making it difficult to compete with highly mature third-party payment tools in the existing market.
- •From the banks’ perspective: In the 1.0 era, commercial banks only served as “distribution windows”, bearing heavy anti-money laundering and system maintenance costs, but unable to generate loans or earn interest spreads through Digital RMB, resulting in a lack of inherent commercial driving force.
Digital RMB 2.0 Era
According to current promotional information, the following changes have been observed:
- •In terms of attributes: It has shifted from “digital cash” to “digital deposit currency”, with interest accrued on the balance of real-name wallets.
- •In terms of technology: Version 2.0 emphasizes compatibility with distributed ledgers and smart contracts. In the eyes of the industry, this is a form of absorption of some Web3 technologies, but it has not adopted the core of decentralization.
The launch of Digital RMB 2.0 proves that programmability, real-time settlement, and on-chain logic are indeed the inevitable forms of future currency. However, within the Mainland, this form is required to operate within a centralized, traceable, and sovereign-backed closed loop. This centralized attempt is an intermediate product of the game between technological evolution and governance logic.
Legal Red Line: Defining the Boundaries of "Illegal Financial Activities"
As a lawyer who has long practiced on the frontlines of Web3, I must remind all practitioners: After 2025, the risk landscape has shifted from “compliance flaws” to “criminal bottom lines”. This judgment includes but is not limited to the following aspects:
Accelerated Classification of Behaviors
Large-scale trading of virtual currencies such as USDT is rapidly transitioning from administrative violations to criminal charges such as illegal business operations. Especially after the “classification of stablecoins” was clarified, the space for technical defense in judicial practice has been greatly reduced for any business activities involving the two-way exchange of Mainland legal tender and stablecoins, or the use of stablecoins as a payment medium or acceptance service.
Regulatory Upgrade
The redefinition of this boundary has essentially further restricted the possibility of non-public entities participating in the innovation of financial infrastructure. Within the Mainland, if a non-public entity attempts to build a non-official value transfer network, regardless of the technology adopted, after in-depth penetration and review by relevant departments, it is highly likely to be legally classified as “illegal settlement”. In other words, “technological neutrality” is no longer a universal shield—when a business involves fund aggregation, redemption, or cross-border transfer, regulatory penetration will directly break through the complex protocol layer and trace back to the operating entity behind it.
Survival Strategies and Breakthrough Suggestions for Web3 Practitioners
The “wall” is indeed getting higher, but the logic has not been interrupted.
The absorption of smart contracts by Digital RMB 2.0 itself shows that technology has not been rejected, but has been re-incorporated into a controllable institutional framework. This also leaves a practical and feasible adjustment space for Web3 practitioners who truly understand technology and business logic.
In the current regulatory environment, a more secure choice is to adopt a “strategic diversion” approach.
1. Overseas Expansion and Compliance at the Business Level
If the goal is to build an unrestricted, decentralized financial application, it should be completely moved overseas both physically and legally. In jurisdictions such as Hong Kong, making full use of licensed frameworks like the Stablecoin Ordinance to carry out global business is an inevitable choice under the premise of respecting rules, rather than a stopgap measure.
2. Conscious “Decoupling” of Technology and Finance
Within the Mainland, any modules with fund-bearing, settlement, or redemption attributes should be firmly avoided. Since the authorities are promoting the Digital RMB 2.0 ecosystem based on a licensed system and supporting smart contracts, shifting focus to underlying architecture, security audits, and compliance technology research and development—becoming a technical service provider for official financial infrastructure—is instead the most stable and sustainable transformation path for current technical teams.
3. Focus on New Opportunities in Official Channels
Cross-border payment systems, including the Multi-Central Bank Digital Currency Bridge (m-CBDC Bridge), are becoming one of the few areas within the compliance framework that still have room for expansion. Finding entry points for technological innovation in existing institutional facilities may be the truly feasible opportunity window in this round of regulatory reshaping.
Law has never been a static set of rules, but the result of negotiations and games.
The rules may seem strict, but understanding the rules is inherently for the purpose of making better choices. In the context of “cage replacement”, blind resistance will only amplify risks; what truly matters is, after the red line is redefined, helping the most valuable technological forces find an anchor point to survive and expand outward.