Pan Gongsheng, Governor of the People's Bank of China, recently stated at the "2025 Financial Street Forum Annual Meeting" that current policy documents related to virtual currencies remain valid, and the central bank will continue to crack down on the operation and speculation of virtual currencies within the country. ... This article will take Governor Pan's speech as a starting point to analyze the logic behind the central government's strong regulation, the institutional flexibility of the Hong Kong market, and the actual development path of blockchain technology in mainland China. It will also explore how to seize the window of opportunity for compliant innovation in the context of continued strict control over cryptocurrency speculation. I. Pan Gongsheng's Speech: Continuing to Solidify the Regulatory Bottom Line of "Virtual Currency and Financial Risk Prevention" On October 27, 2025, the Financial Street Forum Annual Meeting opened. Pan Gongsheng, Governor of the People's Bank of China, attended the opening ceremony and stated that in recent years, virtual currencies, especially stablecoins, issued by market institutions have emerged continuously, but overall they are still in the early stages of development. International financial organizations and central banks generally hold a cautious attitude towards the development of stablecoins. In mid-October, at the IMF/World Bank Annual Meetings in Washington, D.C., stablecoins and their potential financial risks became one of the most discussed topics among finance ministers and central bank governors. Common viewpoints focused on the fact that, as a financial activity, stablecoins currently cannot effectively meet basic requirements such as customer identification and anti-money laundering, amplifying loopholes in global financial regulation, such as money laundering, illegal cross-border fund transfers, and terrorist financing. The prevailing market speculation increases the vulnerability of the global financial system and impacts the monetary sovereignty of some less developed economies. Pan Gongsheng further emphasized that since 2017, the People's Bank of China, together with relevant departments, has successively issued a number of policy documents to prevent and deal with the risks of domestic virtual currency trading and speculation, including the "Announcement on Preventing Risks of Token Issuance Financing" (Announcement 94) and the "Notice on Further Preventing Risks of Virtual Currency Trading and Speculation" (Notice 924). These policy documents remain valid. Going forward, the People's Bank of China will work with law enforcement agencies to continue cracking down on the operation and speculation of domestic virtual currencies, maintaining economic and financial order, while closely monitoring and dynamically assessing the development of overseas stablecoins. From Governor Pan's speech, it can be seen that the central government's regulatory logic for virtual currencies since 2017 has not fundamentally changed. It remains focused on "preventing risks and safeguarding the bottom line," still employing "illegalizing business activities" rather than "pre-approval" regulation, and this approach is unlikely to loosen in the short term. Meanwhile, the central bank will closely monitor the development trend of international stablecoins and dynamically assess their potential spillover effects on the domestic financial order. II. A Relatively Stable Hong Kong Space: A Testing Ground for Compliance and Innovation Unlike the mainland's tone of "a complete ban on virtual currency transactions," Hong Kong, under the "One Country, Two Systems" framework, has consistently adopted a prudent and inclusive attitude in promoting regulatory pilot programs for virtual assets and blockchain applications, striving to build a clear and comprehensive regulatory framework for virtual assets. Hong Kong's regulation of virtual assets is a gradual process, with its core objective being to prevent financial risks while consolidating Hong Kong's position as an international financial center. In 2017, the Hong Kong Securities and Futures Commission (SFC) first indicated that certain Initial Coin Offerings (ICOs) might constitute securities under the Securities and Futures Ordinance and require regulation, laying the foundation for the classification of virtual assets. In October 2022, the Hong Kong Financial Secretary issued the "Policy Declaration on the Development of Virtual Assets in Hong Kong," marking the beginning of the government's systematic promotion of virtual asset development. A key milestone was the official implementation of the "Guidelines Applicable to Virtual Asset Trading Platform Operators" on June 1, 2023, establishing a mandatory licensing system for virtual asset trading platforms. Subsequently, in June 2025, the Hong Kong SAR Government released the "Hong Kong Digital Asset Development Policy Declaration 2.0," proposing the "LEAP" framework and further clarifying development directions such as optimizing laws and regulations and expanding the types of tokenized products. On August 1, 2025, the Hong Kong Stablecoin Ordinance officially came into effect, marking the establishment of the world's first comprehensive regulatory framework for fiat-backed stablecoins. This ordinance aims to regulate the issuance of fiat-backed stablecoins, requiring relevant entities to apply for licenses from the Financial Supervisory Commission and implementing provisions regarding reserve asset segregation, stability mechanism maintenance, and face-value redemption. On November 3, 2025, the Hong Kong Securities and Futures Commission issued two important circulars: the "Circular on Expanding Products and Services of Virtual Asset Trading Platforms" and the "Circular on Sharing Liquidity among Virtual Asset Trading Platforms." These two documents represent not only a significant evolution of Hong Kong's virtual asset regulatory system but also a strategic move for Hong Kong to seize a leading position in the global digital asset competition landscape and promote the steady development of the industry. In terms of infrastructure, on October 22, 2025, the State Information Center's "Spark Chain Network" international super node was officially launched in Hong Kong. This marks the first time a national-level digital infrastructure has established a node overseas, which will facilitate the cross-border flow of trusted data and the compliant on-chain identity authentication (DID) for financial institutions. The establishment of this node signifies that Hong Kong will play a crucial role in the circulation of trusted blockchain data and the development of standards for cross-border digital assets. SparkChain, as a national-level blockchain infrastructure, explores the deep integration of blockchain technology and the national digital economy strategy through its system architecture of "interconnected chains, controllable data, and trusted identities." This demonstrates that Hong Kong is considered a "window" for the development of virtual assets not because of its lax regulation, but because it has established a more refined and controllable regulatory system. Simultaneously, the national-level blockchain infrastructure based in Hong Kong provides strong support. In the future, Hong Kong's policy flexibility, under the premise of controllable risks, will continue to provide institutional guarantees for the development of blockchain technology, digital financial innovation, and international capital flows, becoming an important bridge between the mainland and international markets. III. Exploration of Compliance in Mainland China: From "Public Blockchain" to "Trusted Data Space" While virtual currency trading and ICO financing are prohibited in mainland China, virtual currency is not equivalent to blockchain. The central government's decision not to legalize virtual currency stems from financial security concerns such as preventing capital flight, money laundering and cross-border illegal transfers, and preventing speculative bubbles from harming residents' assets, rather than from the technological issues upon which blockchain, a virtual currency, relies. It's important to understand that the central government prohibits "currency," not "chain," allowing the development of "currency-free blockchains" and "trusted data systems." In fact, research and application of blockchain underlying technology in mainland China has never stopped. In recent years, policies have repeatedly emphasized the need to "develop the digital economy and build a trustworthy data element market," and many local governments and research institutions have actively promoted innovative projects centered on public chain technology and the trustworthy circulation of data. (I) Exploration of Public Chains and National Development Strategy For the first time, the 14th Five-Year Plan outline included blockchain in the national development strategy, listing it in the chapter on "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 Cyberspace Administration of China, by 2030, "blockchain will become an important support for building a manufacturing powerhouse and a cyber powerhouse, developing the digital economy, and realizing the modernization of the national governance system and governance capabilities." First, it should be pointed out that, unlike typical international public chains that are "cryptocurrency-based" and "decentralized," mainland China emphasizes public chains that are "currency-free," "controllable," and "applicable and compliant." It is not intended as a "currency speculation tool," but rather positioned as "digital infrastructure" and a "trustworthy data circulation foundation." In mainland China, the development of "public chains" is highly correlated with strategies such as "trustworthy data space," "digital economy," and "new infrastructure," and is one of the important directions for promoting technological innovation and the construction of the digital economy. Currently, research on public blockchains in China mainly focuses on independent and controllable open-source ecosystems. Their designs exclude cryptocurrency issuance and mining mechanisms, emphasizing identity trust, access control, and multi-party collaboration. Currently, the main domestic public blockchains are as follows: (II) Trusted Data Space: A New Application Scenarios for Blockchain "Trusted Data Space" is an important concept in the construction of Digital China in the past two years. It does not refer to a single "chain," but rather a data governance system. The Trusted Data Space aims to achieve data ownership verification, circulation, traceability, and auditability through technologies such as blockchain and privacy computing. In simple terms, it solves the problem of "how different institutions can share, circulate, use, and benefit from data while ensuring privacy and security." In this system, blockchain plays a crucial role in ensuring data authenticity, traceability, and tamper-proofing; privacy computing technology guarantees data security and compliance during circulation, ensuring that "data is usable 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 bureaus in a "trusted data space" without leaking personal privacy; every access is recorded on the blockchain, making it auditable and traceable. This mechanism has been implemented in finance, government affairs, healthcare, energy, and other fields, becoming an important direction for blockchain innovation in mainland China. Through the coordinated development of public blockchains and trusted data spaces, China is forming a digital infrastructure path characterized by "technological neutrality, functional controllability, and compliance first," which is completely different from the speculative activities of virtual currencies. From a regulatory perspective, the focus of this speech was not on "new regulations," but on "clarifying boundaries." However, this does not mean that the development space for blockchain and related digital assets has been closed. On the contrary, the central government has formed a controllable experimental zone and technical support surface through "Hong Kong's institutional innovation window" and "the construction of the mainland's technology and data system," enabling the industry to explore more mature business models in the future within a compliant framework. For businesses, the key is not "whether to do it," but "how to do it." The window of opportunity for compliant innovation always exists. In the future, how to achieve efficient integration of digital finance and the real economy under controllable risks will be a challenge faced by both regulators and industry.