I mentioned a few days ago in my livestream that there will definitely be moves in virtual currency legislation in 2026.
Here it is, at the beginning of 2026, this Central Political and Legal Affairs Work Conference has directly placed virtual currency alongside autonomous driving and low-altitude economy for the first time, clearly proposing forward-looking legislative research.
This time it’s not just a simple policy statement; this time it should be a real move.
Today, Lawyer Zhang will start from the whole legislative matter, unpack the signals released by this conference, and discuss the future direction.
First, let's understand: why is legislation being proposed right now?
The Central Political and Legal Affairs Work Conference focuses on one thing each year - setting the tone for the direction of political and legal work for the year. In 2026, as we start the 14th Five-Year Plan, we need to deal with geopolitical games outside and accelerate economic transformation and technological change domestically.
Under this triple pressure and background, highlighting virtual currencies specifically means at least three things:
First, it cannot be blocked anymore; a change in thinking is needed.
In the past, regulation of virtual currency was primarily a one-size-fits-all approach; in 2017, ICOs were banned, and in 2021, mining was cleared out, clearly stating that trading speculation is an illegal financial activity.
But what is the result? Transactions have moved underground, with advertisements flooding WeChat groups for low-priced U, making scams and money laundering methods even more concealed.
Just like the previous case of a robbery of 400,000 USDT in Hebei, if it weren't for the strong case, the victim's money might have really gone down the drain.
Perhaps this time, those in power have also realized that blocking is not as effective as guiding. Rather than letting the entire industry hide in the gray area, it is better to clarify the boundaries of compliance and proceed with development where necessary and crack down where needed.
Second, there are too many disputes, it cannot be done without legislation.
In recent years, Zhang Lu has handled too many virtual currency disputes where cases were not filed and there was no legal basis.
Some people sold U for millions, but the other party said the account could not transfer U due to multi-signature; as a result, the police did not intervene, and the court did not file a case; some people's U was stolen, and the police caught the person but did not know how to deal with the seized assets; some people had their U robbed and could only accept their misfortune.
Even some companies engaged in blockchain technology, clearly dealing with supply chain finance, are shunned by investors just because they are associated with digital assets.
This legislative research may be an opportunity to resolve these issues, first clarifying whether virtual currencies are property, goods, or securities, and then determining how to recover, cash out, and return seized assets, so that future rights protection and case handling have clear guidelines.
Third, if we don't catch up now, we might be left behind by the times.
Now the whole world is competing for the Web3 track; Japan is issuing licenses for virtual currencies, Hong Kong is establishing a regulatory framework for stablecoins, and the US has already set rules for USDT.
If we still rely on 'prohibition' to live, not only will we miss opportunities for technological innovation, but we will also lose our voice. This time, placing virtual currencies alongside unmanned driving and low-altitude economy might be an attempt to find our own compliant development path for WEB3.
However, everyone should not get too excited about legislation; do not think that trading cryptocurrencies will be completely legal in the future.
I believe the core of this transformation is regulation, not deregulation. In the future, there should first be a clear legal position for virtual currencies.
Combining the previous statements of the central bank and judicial practice, I dare say: it is highly likely that the classification will still follow the 9.24 announcement, defined as 'virtual property', protected by law, but absolutely not as legal tender.
To put it simply: if your U is stolen, the police can file a case as 'robbery'; if your investment is defrauded, you can pursue it legally;
But don’t expect to use U to buy groceries or pay rent— it does not have the status of legal tender and cannot circulate in the market.
Secondly, the intensity of the crackdown on cases involving virtual currencies will definitely be stricter than before.
Legislation does not mean laissez-faire! The meeting specifically emphasized the need to strictly prevent the use of blockchain technology to evade regulation. In plain language, this means:
Illegal buying and selling of foreign exchange, as well as illegal cross-border fund transfers, are both illegal activities, and the crackdown will be stronger and more precise. In the future, this process will also become more standardized, making it harder for illegal industries to find loopholes.
For old investors, legislation does not mean that trading cryptocurrencies will not incur losses; those who should lose will still lose.
The nature of virtual currency prices rising and falling sharply has not changed; previously, Bitcoin dropped from 126,000 to 82,000, and countless positions were liquidated across the network; such incidents will happen again in the future.
The benefit is that if you encounter virtual currency fraud or robbery in the future, there will be legal remedies available.
As long as you keep the transaction hash, wallet address, and chat records, the police can file a case after reporting it, and the seized assets can be recovered legally—this is definitely better than before.
For industry practitioners, certainty has arrived; it's time to change tracks.
In the past, the biggest pain point in the industry was 'uncertainty'; now that pain point is gone. After the legislative signal is clear, compliant technology companies may usher in a springtime.
But you must remember, before the details come out, do not mess around. Do not engage in virtual currency trading, do not do ICOs, do not engage in cross-border speculation.
For investors looking to invest in WEB3, a word of advice: withdraw from those gray projects quickly; there are some compliant tracks worth investing in.
In the past, some investors held a 'gamble' mentality and invested in many gray projects. Now that the legislative signal is clear, the survival space for these projects will become smaller and may even be defined as illegal.
In the future, only two types of projects are worth paying attention to:
First, the compliance scenarios for the application of blockchain technology.
Second, compliance services in the virtual currency field (such as handling seized assets and legal consulting).
These tracks will usher in a real dividend period due to the certainty brought by legislation.
Combining regulatory logic with the experience of foreign regulations, I predict that future regulation will likely follow the route of 'clear boundaries + negative lists + international cooperation':
In the future, a list will likely be compiled, clearly stating all illegal activities: such as trading speculation of virtual currencies, ICO financing, using virtual currencies for cross-border payments, providing intermediary services for speculation... as long as it touches something on the list, it is illegal.
In this way, the red line is clear, and the cost of compliance will be greatly reduced.
2. Establish a standard process for handling seized assets.
In the future, the virtual currency recovered by the police will follow the route of 'domestic entrustment + Hong Kong licensed exchanges for cashing out + foreign exchange approval for repatriation.' This process will become a standard operation that is both compliant and can protect the rights of victims.
3. Strengthen international cooperation, crack down on cross-border illegal industries, and enhance tax compliance.
Virtual currencies have no borders, and illegal industries will not only stay in one country. In the future, we will strengthen cooperation with other countries, share on-chain traceability data, and crack down on cross-border fraud, money laundering, and regulatory arbitrage.
Those who want to run abroad to continue illegal activities will eventually be caught and brought back.
This time, the central political and legal work conference marked a shift from 'blocking' to 'guiding', indicating that the era of reckless growth of virtual currencies has ended.
The era of the rule of law has arrived, and some people's wallets will swell again.
