According to Xiao Feng, Chairman and CEO of HashKey Group, China may soften its stance towards cryptocurrency within two years due to forthcoming supportive regulations from President-elect Donald Trump’s administration in America. According to Xiao Feng, such clear regulations may cause China to reconsider its current prohibition stance and change their prohibition approach accordingly.
Potential Reasons for China’s Policy Reevaluation
Xiao Feng recently stated in an interview that several factors could accelerate China’s adoption of cryptocurrencies, particularly geopolitics related to Russia being excluded from SWIFT due to sanctions related to Ukraine conflict sanctions and consequent exclusion. As a result of these global shifts, Chinese financial authorities may turn towards exploring cryptocurrencies more eagerly as an avenue of maintaining financial sovereignty; which could shorten acceptance timeline from five or six years to two.
China has taken an uncompromising stance against cryptocurrency activities such as trading, mining and Initial Coin Offerings (ICOs), citing concerns over financial stability and illegal activities. Hong Kong, however, has allowed its digital asset industry to flourish; this could serve as an intermediary if mainland China decides to ease restrictions.
Xiao suggests that should China reenter the digital asset market, its initial emphasis may be on regulated stablecoins due to their utility for cross-border business transactions. A survey conducted by HashKey in Yiwu revealed significant international buyer interest in conducting payments via USDT and USDC stablecoins.
Even without indications from China regarding any policy change, Xiao emphasized the significance of maintaining an operational base in Hong Kong as this will allow him to capitalize on market opportunities when they arise in mainland China.
Digital currency dialogue continues to develop rapidly; at the time of reporting, Bitcoin had reached a trading price of $91,083, reflecting a vibrant market that may spur countries such as China to consider participating in it more actively in the near future.
