Binance Facilitates $90B in Chinese Crypto Trade
Reports are challenging the notion that China has totally banned cryptocurrencies. Binance, the top crypto exchange, reportedly facilitated $90 billion in Chinese crypto trade in a month.
China’s Cryptocurrency Policies
China’s stance on cryptocurrency is more complex than commonly believed. While there have been crackdowns on financial institutions and initial coin offerings, people can still hold and trade cryptocurrency. In 2021, there was a crackdown on Bitcoin, classifying it as not real money, and banning activities related to virtual currency as illegal financial activities.
Loophole In Crypto Ban
Despite the restrictions, people in China continued to hold and trade cryptocurrency through overseas accounts, VPNs, and social apps. It appears that China didn’t really want to eliminate crypto entirely.
China’s Dual Dance
China’s cautious approach to crypto relates to concerns about potential misuse for evading capital controls. Yet, it has shown interest in blockchain technology and explored a central bank digital currency. This dual approach implies that China may be leaving the door open for crypto while managing risks.
Hong Kong’s Role
Hong Kong, operating under the “one country, two systems” model, has positioned itself as a digital asset hub in Asia. Its relatively favorable stance toward crypto, coupled with Beijing’s approval, allows China to maintain a foothold in the crypto sphere while managing risks.
Hot Take
China’s crypto policy aims to control and regulate crypto activities rather than eliminate them entirely.
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