Danny Deng
Mar 27, 2026 05:01
The Catastrophic Consequences of Translating “Token” as “Dài Bì” (代币 — Currency Substitute)
Danny Deng
Associate Research Fellow, School of Accounting and Finance, The Hong Kong Polytechnic University
Co-Director, AI FinTech Trading Research Group
The Most Expensive Translation Error in Tech History
Imagine if the early internet community had translated “website” as “illegal printing press” — and then watched governments worldwide use that very term as justification for shutting down the entire industry.
That, in essence, is what happened to blockchain technology in China.
In the early 2010s, as Bitcoin evangelists spread their gospel across Chinese social media, someone needed to translate the word “token” into Mandarin. The choice they made — dài bì(代币), literally meaning “currency substitute” — seemed intuitive at the time. After all, wasn’t Bitcoin a kind of digital money?
What followed was a decade-long regulatory catastrophe, a missed window of technological leadership, and an epistemic wall that now stands between China and the global digital asset revolution. And it all traces back to two characters.
Part I: What “Token” Actually Means
Before diagnosing the damage, we need to understand the patient.
In computer science, “token” is one of the most semantically neutral words in the entire vocabulary. It is, fundamentally, a symbol that carries meaning assigned to it by its context — nothing more, nothing less.
The word has at least three distinct technical lives:
Authentication Token — In cybersecurity, a token is a credential: a digital badge that says “this entity has been verified and may proceed.” OAuth tokens, JSON Web Tokens (JWTs), session tokens — these underpin virtually every secure login on the internet. They have nothing to do with money.
Linguistic Token — In natural language processing and large language models, a token is the minimal unit of text a model processes. Half a word, a full character, a punctuation mark — any of these can be a token. China’s national standards body has recently standardized this as cí yuán(词元), “lexical unit” — a precise, neutral, uncontroversial translation.
Blockchain Token — This is where the trouble begins. In the blockchain context, a token is a unit of value or rights representation issued via smart contract. It can represent equity, voting rights, access permissions, service entitlements, fractional ownership of real-world assets, or indeed, in some cases, a currency-like medium of exchange.
The crucial insight: a blockchain token is not inherently any of these things. It is a programmable container — a blank vessel whose contents are defined by whoever deploys it and whatever rules they encode. Calling all tokens “currency substitutes” is like calling all containers “gasoline tanks” because gasoline sometimes comes in containers.
Part II: The Translation Decision and Its Immediate Consequences
When Chinese blockchain enthusiasts in 2013-2016 chose dài bì(代币) as their translation, they were thinking primarily about Bitcoin. Bitcoin does function as a currency-like instrument. The translation felt apt.
But languages shape cognition. Once dài bìentered the Chinese lexicon, it didn’t merely describe one type of token — it defined what a token was, in the minds of regulators, journalists, judges, and the public.
Dài(代) means “substitute” or “stand-in for.” Bì(币) means “currency” or “coin.” Together, they evoke game arcade tokens, casino chips, transit card credits — objects that function as money but aren’t real money. Objects that are, by their very nature, tightly controlled, limited in scope, and subject to strict regulation.
Under Chinese law, this framing was lethal. The Law of the People’s Bank of Chinaexplicitly prohibits any entity from issuing substitutes for RMB. The moment ICO projects were framed as “issuing dài bì,” regulators had a ready-made legal hook. No nuanced discussion of smart contracts, utility functions, or governance rights was necessary. The thing was, by its own name, a currency substitute — and currency substitutes are illegal.
In September 2017, seven Chinese ministries jointly issued a landmark regulatory notice: “Announcement on Preventing the Financing Risks of Token (dài bì) Issuance.”The document’s title contained the word dài bì— borrowed directly from the industry’s own vocabulary. The crackdown was total: all ICOs were banned, domestic cryptocurrency exchanges were shuttered, and an entire ecosystem was dismantled overnight.
The translation had become the indictment.
Part III: The Five Faces of Token — What China Couldn’t See
The deepest damage wasn’t the 2017 crackdown itself. It was the cognitive foreclosure that followed.
Because dài bìcolonized the conceptual space around “token,” Chinese regulators, courts, and even innovators struggled to see the full range of what blockchain tokens can be. Consider the five categories that the U.S. Securities and Exchange Commission formalized in its landmark March 2026 interpretive guidance — the first-ever official “Token Taxonomy” in American regulatory history:
Digital Securities — Tokens that meet the Howey Test criteria for investment contracts: an investment of money in a common enterprise with expectation of profits from others’ efforts. These are essentially traditional securities in new technological clothing, and they deserve securities law oversight.
Digital Commodities — Tokens with intrinsic utility that trade on their own merits, not as investment contracts. Bitcoin and Ethereum are the paradigmatic examples. These fall under the Commodity Futures Trading Commission’s jurisdiction, not the SEC’s.
Payment Stablecoins — Tokens pegged 1:1 to fiat currency, designed for payment and settlement. These are closer to digital dollars than to securities or commodities, and belong under banking and payment systems regulation.
Digital Tools — Tokens that grant holders access to specific platform features or protocol functions: think gas tokens, service credits, API access passes. These are software licenses wearing blockchain clothes. General commercial law, not securities law, is the appropriate framework.
Digital Collectibles — Unique tokens representing digital art, memorabilia, or cultural artifacts whose value derives from scarcity and cultural significance rather than investment returns. Consumer protection law is the relevant regulatory domain.
SEC Chairman Paul Atkins summarized the philosophy with admirable clarity: “Most crypto assets are not themselves securities.”
This is the sentence that exposes dài bìfor the category error it has always been. Most tokens are not currency substitutes either. They are digital tools, digital commodities, digital securities, digital collectibles — each with its own nature, its own regulatory logic, its own place in the economic ecosystem.
China’s dài bìframework could only see one of these five faces. The other four remained invisible, unthinkable, and therefore undevelopable.
The cost: China largely sat out the most innovative period in blockchain application development — 2018 to 2022 — during which DeFi, NFTs, DAOs, tokenized real-world assets, and institutional-grade digital securities infrastructure all emerged and matured in jurisdictions that didn’t carry this linguistic baggage.
Part IV: The Word That Should Have Been Chosen
The Chinese language actually offers a far better option, one developed by blockchain scholars precisely to escape the dài bìtrap.
Tōng zhèng(通证) — sometimes translated as “certified pass” or “verified circulation certificate” — was systematically proposed by academic researchers including Meng Yan in 2017-2018. It combines two characters whose meanings are remarkably apt:
Tōng(通): flowing, circulating, verified, passable — capturing the permissionless transferability of blockchain tokens.
Zhèng(证): certificate, proof, credential, attestation — capturing the fact that a token represents a verified claim on something real: rights, access, value, ownership.
Together, tōng zhèngmeans something like “a verified, circulating proof of rights” — which is exactly what a blockchain token is in its most general form.
This framing would have placed tokens naturally within the legal and conceptual space of asset securitiesand property registration, rather than currency issuance. The regulatory question would have been: “What rights does this certificate represent, and are those rights subject to securities law?” — not “Is this an illegal currency substitute?”
That is precisely the question the SEC finally asked in 2026, nine years after China had foreclosed it with a mistranslation.
The parallel to AI terminology is instructive. When Chinese national standards authorities needed to translate “token” for the AI/NLP domain, they chose cí yuán(词元) — “lexical unit.” It is precise, technical, neutral. No one fears cí yuán. No ministry has issued an emergency notice banning the use of cí yuán. The choice of language was deliberate, and it produced a productive regulatory environment.
Language choice is always a choice.
Part V: The Coming Crisis — Hong Kong, the Mainland, and the Untranslatable Divide
Here is where the problem stops being historical and becomes urgently contemporary.
Since 2023, Hong Kong has moved aggressively to position itself as Asia’s compliant digital asset hub. The Securities and Futures Commission (SFC) has issued a licensed exchange framework, tokenized real-world asset guidelines, and stablecoin consultation papers. A sophisticated, function-based regulatory architecture is taking shape — one whose conceptual DNA is closely aligned with the SEC’s Token Taxonomy.
Simultaneously, mainland China has been cautiously exploring digital asset applications within compliant frameworks: data asset exchanges in Shenzhen and Shanghai, digital RMB expansion, and quiet observation of Hong Kong’s experiments.
The implicit logic is a kind of “One Country, Two Systems for Financial Technology”: Hong Kong pioneers, the mainland observes, and successful models eventually inform national policy.
This logic makes sense in every dimension except one: the two sides don’t speak the same language about the thing they’re both trying to regulate.
Hong Kong regulators use “token” and “tokenization” directly from English, or render them as dài bì huà(代币化) in Chinese with a functional, category-based interpretive framework underneath. Mainland regulators hear dài bìand activate a different cognitive schema entirely — one hardwired to currency prohibition, financial risk, and the memories of the 2017 crackdown.
The practical consequences will be severe:
Cross-border Product Filing: A Hong Kong-compliant “tokenized brand equity fund” with “代币化” in its prospectus will trigger automatic compliance flags when seeking mainland distribution approval — not because the underlying activity is problematic, but because the words on the page pattern-match to prohibited activity.
Mainland Issuers Going to Hong Kong: A mainland entity seeking to issue RWA tokens in Hong Kong faces a translation paradox. The English documents, prepared by Hong Kong lawyers, use “tokenization.” The Chinese version must interface with mainland legal frameworks. Write “代币化” and you activate the mainland prohibition schema. Write “数字资产登记” (digital asset registration) and you’ve introduced a legal inconsistency with the English original that creates its own risks.
Regulatory Cooperation: When mainland and Hong Kong regulators jointly investigate a cross-border digital asset case, one side may classify the activity as “compliant security token issuance” and the other as “illegal token financing.” This is not a legal conflict. It is a linguistic conflict that has produced a legal conflict.
The deepest problem is cognitive. In the mainland regulatory mindset, shaped by years of dài bìdiscourse, the mental chain runs: token → currency substitute → illegal → shut down. This is not a policy position that can be easily revised by issuing new guidance. It is an embedded cognitive reflex, baked in by years of regulatory documentation, court decisions, and enforcement actions — all of which used the word dài bìas their organizing concept.
In the Hong Kong regulatory mindset, shaped by SFC guidance and international frameworks, the mental chain runs: token → digital asset → what are its functional characteristics → what regulatory bucket does it belong in?
These two mindsets cannot coordinate effectively until they share a common vocabulary. And they currently do not.
Projection: Absent a national-level effort in mainland China to standardize “digital asset tōng zhèng” terminology, the Hong Kong-mainland digital asset integration framework will face serious institutional friction before 2028. The obstacle will not be technology. It will not be capital. It will be a translation made in haste a decade ago.
Part VI: A Path Forward
The problem is not insoluble. China has successfully standardized technical terminology before — the AI example demonstrates this. The pathway exists:
Standards Body Initiative: The National Technical Committee on Information Technology Standardization (TC28) or the Financial Standards Committee (TC180) should initiate a revision of blockchain asset terminology in national standards, formally establishing zī chǎn tōng zhèng(资产通证, “asset token”) as the normalized Chinese equivalent.
Five-Category Chinese Taxonomy: Corresponding to the SEC’s five categories, a parallel Chinese terminology framework should be established: 数字证券通证 (digital security token), 数字商品通证 (digital commodity token), 支付通证 (payment token), 功能通证 (utility/tool token), 数字收藏通证 (digital collectible token). This is not just translation — it is the construction of a shared conceptual infrastructure for regulation.
Regulatory MOU: The Hong Kong SFC and China Securities Regulatory Commission should include a core terminology cross-reference table in bilateral regulatory cooperation memoranda. This is a small step with large consequences: it creates a shared reference point for every future regulatory communication.
Industry Self-Regulation: Chinese blockchain and digital asset industry associations should formally adopt tōng zhèngin their member communications, event materials, and public advocacy — gradually displacing dài bìthrough consistent, coordinated usage.
Image source: Shutterstock
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