HashKey Group Chairman and CEO Xiao Feng noted that China’s tough stance on cryptocurrencies could ease over the next two years, influenced by the pro-crypto policies expected under US President-elect Donald Trump. Xiao believes that clear regulatory support in the US could serve as an incentive for China to reconsider its current ban.
Why could China reconsider its crypto ban?
“If the US Congress and the new president establish clear policies for cryptocurrencies and actively promote the industry, it will definitely be a driving force for China to accept cryptocurrencies,” Xiao said in a statement. interview With the South China Morning Post.
Xiao also pointed to geopolitical factors that may accelerate China’s acceptance of digital assets. The exclusion of Russia from the SWIFT financial messaging system by the United States and its allies in 2022 underscored the importance of alternative financial infrastructures. The move, part of sanctions related to the conflict in Ukraine, may prompt China to explore cryptocurrencies more seriously to protect its financial independence.
“If it were not for these events, China might have needed five or six years to accept cryptocurrency businesses. Now, because of these factors, this time frame could be shortened to two years,” Xiao explained.
Over the past several years, China has imposed a strict ban on initial coin offerings (ICOs), cryptocurrency trading, mining, and other related activities. Authorities cited concerns about financial stability and the potential for illicit activities as the main reasons for the crackdown. Despite this, Hong Kong has been allowed to develop its own digital assets industry, positioning itself as a potential bridge if mainland China relaxes its regulations.
If China decides to re-engage with the digital assets market, Xiao suggests that regulated stablecoins could be the initial focus. “Stablecoins are currently the best solution for cross-border B2C commerce,” he noted.
To support this view, HashKey conducted a survey in Yiwu City, a major manufacturing and trading center in mainland China. The survey revealed that almost all merchants received inquiries from international buyers about making payments using popular US dollar-based stablecoins such as USDT and USDC.
HashKey Group operates HashKey Exchange, one of three licensed cryptocurrency exchanges in Hong Kong. The company plans to launch its own blockchain, HashKey Chain, next month. With over 300 employees in Hong Kong and additional teams in Singapore, Tokyo, Dubai, Bermuda and Europe, HashKey is expanding its global footprint.
While the Chinese government has not indicated any immediate plans to ease the cryptocurrency ban, Xiao stressed the importance of maintaining a strong presence in Hong Kong. “Only by staying in Hong Kong can we serve mainland China when this market opens up. We firmly believe that day will come,” he stressed.
At press time, Bitcoin was trading at $91,083.
Featured image created with DALL.E, a chart from TradingView.com
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