-
Although no one can say for sure, experts believe China regrets the Bitcoin ban.
-
So far the Chinese government has given no signs that it will relax its ban.
During his election campaign, Donald Trump promised to turn the United States into a paradise for bitcoin (BTC) and other cryptocurrencies, a goal that if met, could set off alarm bells for the Chinese government, in the midst of the trade war between the two countries that the now president-elect unleashed in his first term.
Hence, several analysts remember some of the words related to the Asian countrywhich Trump said in the middle of his promises. Last July, when asked why he was suddenly embracing the Cryptocurrency community, answered the following: “If we don’t do it, China will pick it up and China will have it, or someone else, but most likely it will be China.”
These statements have served as a framework for the president and CEO of HashKey Group, Xiao Feng, Blockchain/article/3286069/trumps-crypto-support-may-see-china-restore-digital-asset-market-hashkey-head-says”>offer your impressions to the South China Morning Post newspaper, evaluating what will happen to cryptocurrencies in both countries.
For Feng, although China banned cryptocurrency trading and Bitcoin Mining in 2021, Trump’s new entry into the White House could activate the interest of the Chinese government by cryptocurrency trading and mining markets.
If the US Congress and the (incoming) president set clear crypto policies, constantly legislate and promote the industry, it will certainly be a driving force for China to accept (cryptocurrencies).
Xiao Feng, CEO of HashKey Group.
According to Xiao, the measure taken by the West in 2022 to isolate Russia from the Swift system – as part of sanctions aimed at putting pressure on Moscow for its invasion of Ukraine – may help convince Beijing to support the cryptocurrency sector. This would also influence he dedollarization process that have been promoting these two countries.
Additionally, he thinks that the possibility of the United States gaining greater strength as a leader in the Bitcoin ecosystem could mobilize the competitive spirit of the Chinese.
And although so far the Chinese government has given no signs that it is going to relax the ban on Bitcoin, it draws attention to the fact that it has let Hong Kong move forward with its opening to the digital asset industry.
Based on this, he considers that Xi Jinping’s government could implement, in the future, a payment compensation system. based on regulated stablecoins.
As CriptoNoticias reported, China was once an important player in the cryptocurrency market. Until 80% of bitcoin mining was made in mainland China a few years ago. But in 2021, the government cracked down on cryptocurrency trading and mining, and in July of that year, Bitcoin mining had practically disappeared from the country.
Hong Kong would be the base of cryptocurrency operations
More than three years have passed since the ban. But a series of speculations suggest that “China could be moving closer to cryptocurrencies and that Hong Kong would be a testing ground for these efforts,” as commented the Chainalysis team last September.
In fact, in April 2024, the central government approved the launch of several exchange-traded funds (ETFs) of Bitcoin in Hong Kong. A fact that led some observers to say that China’s plan is to turn Hong Kong into a cryptocurrency hub, while maintaining the continued ban on transactions in mainland China.
At this point, the chief economist of Tressis, Daniel Lacalle, assures that “China made a huge mistake by prohibiting the trading and mining of cryptocurrencies, particularly when they want to de-dollarize at some point. The decision did not help the yuan and eliminated an important disruptive technological development.
The idea is supported by Emiliano Pagnotta, associate professor of finance at the Singapore Management University, for whom “the 2021 mining offensive was a strategic mistake.” The measure led to them losing in a short time a considerable percentage of hashrate before the United States.
A Bitcoin adversary has much more power over the security properties of the network by controlling the majority of the hashrate. That latent threat is much more powerful than the ban itself, which only caused a temporary drop in hashrate.
Emiliano Pagnotta, Professor Singapore Management University.
However, none of the analysts can be sure that China is regretting its decision.
In that sense, Yikai Wang, assistant professor of economics at the University of Essexdon’t believe that the government is complaining, “because the capital markets in China and Hong Kong are different.”
It thus infers that what the government seeks is to maintain strict control of capital outflows on the continent, and that is why it prohibits cryptocurrency trading.
That is why you see Hong Kong – an area controlled by China, but with a free economy – as the only way out that China has to enter into competition with the United Stateswithout lifting the ban on Bitcoin.
“Hong Kong’s most flexible stance could be a strategic measure to compete in the fintech and digital finance space without completely reversing its continental policy,” says Zennon Kapron, founder and director of the consulting firm Kapronasia.
Trump could unleash the desire for control
However, experts consider that if Trump really leads the United States to be a financial hub for the bitcoin ecosystem, it is possible that the Chinese government will be driven to compete with the United States on another level, removing some prohibitions for try to gain power.
Wang thinks that if it puts its mind to it, China could still play an important role in the cryptocurrency sector. No wonder it is currently one of the main countries converted into “bitcoin whales”.
Despite this, analysts insist that, due to the decentralized nature of cryptocurrencies like bitcoin, “attempts at government control are meaningless.”
Crypto Keynote USA
For the Latest Crypto News, Follow ©KeynoteUSA on Twitter Or Google News.
