Xiao Feng, chairman and CEO of Hashkey Group, a licensed cryptocurrency exchange in Hong Kong, said that if U.S. President-elect Donald Trump and the U.S. Congress clarify cryptocurrency policies, continue to legislate and promote the development of the industry, this will definitely become a driving force for China to accept Bitcoin and cryptocurrency, thereby reviving the digital asset market.
But Xiao Feng believes that Trump’s support for cryptocurrencies may push China to revive its digital asset market.
He noted that the exclusion of Russia from the SWIFT international settlement system by the United States and its Western allies in 2022 could also prompt China to support the cryptocurrency industry.
“If these events hadn’t happened, it would have taken China five to six years from now to accept cryptocurrency businesses,” he said. “But now, because of these factors, that time frame may be shortened to two years.”
It is important to emphasize that the Chinese government has so far shown no signs that it may relax its ban on digital assets.
The People's Bank of China (PBOC) issued a notice in September 2021, completely banning services related to virtual currency settlement and providing trader information. Those who engage in illegal financial activities will be held criminally liable. Overseas virtual currency exchanges that provide services to residents in China through the Internet are also banned, and relevant departments will strengthen monitoring of all related activities.
The notice issued by the People's Bank of China pointed out that "the rise of virtual currency trading speculation has disrupted the economic and financial order and spawned illegal and criminal activities such as gambling, illegal fund-raising, fraud, pyramid schemes, and money laundering." It also listed the names of virtual currencies such as Bitcoin, Ethereum, and Tether (USDT), and clearly stated that they are not allowed to circulate in the market. In the future, the competent authorities will strengthen supervision and crackdown.
However, China has allowed Hong Kong to develop its digital asset industry.
Xiao Feng said that if China wants to resume the development of its digital asset market, it can start with a payment and clearing system based on regulated stablecoins.
He further explained: “Stablecoins are currently the best solution for cross-border business-to-consumer trade.”
He cited fast transaction speeds and low fees as reasons.
Xiao Feng said that his HashKey team recently conducted a survey in Yiwu and found that almost all merchants had received inquiries from buyers about whether they could use popular US dollar stablecoins such as USDT and USDC for payment.
It is worth noting that Nano Labs, a Chinese company specializing in the production of microchips for cryptocurrency mining, announced on November 11 that it will begin accepting Bitcoin as a payment method for its products and services with the support of Coinbase, the largest compliant cryptocurrency exchange in the United States.
According to a statement on its official website, the decision was made in response to the growing demand for cryptocurrency transactions and to provide customers and partners with more flexible payment methods.
