Since 2013, China has been playing hardball with crypto, locking out banks from Bitcoin transactions. But hold onto your hats because at the 2024 Tsinghua PBC Chief Economist Forum, former Vice Minister of Finance Zhu Guangyao dropped some bombshells!
Zhu called on China to rethink its crypto stance, pointing out how the global scene, especially in the U.S., is warming up to digital currencies. Even big names like U.S. presidential candidate Donald Trump are giving crypto a thumbs-up.
Sure, Zhu didn't shy away from the risks and challenges that come with crypto. He mentioned the potential pitfalls for the capital markets but also stressed the importance of keeping an eye on international trends and policy shifts. “We need to recognize its risks, but we can't ignore its role in the digital economy,” he said.
Zhu took us on a quick trip down memory lane, noting how the U.S. has traditionally viewed digital currencies with suspicion, mainly due to concerns about money laundering and terrorist financing. But oh, how times have changed! This year, the U.S. seems to be doing a 180. Trump’s campaign is all about embracing crypto to avoid being outpaced by China.
Plus, the U.S. Securities and Exchange Commission (SEC) has been busy giving the green light to Bitcoin exchange-traded funds (ETFs) and even some Ethereum (ETH) products. Quite the turnaround, right?
But wait, there’s more! Zhu highlighted that countries in the BRICS group, like Russia, South Africa, Brazil, and India, are also jumping on the crypto bandwagon, integrating digital currencies into their financial systems.
China’s love-hate relationship with crypto is a saga for the ages. It all started in December 2013 when the People’s Bank of China (PBoC) and other regulatory bodies told banks to cut ties with Bitcoin. Fast forward to 2017, and China went all out, banning Initial Coin Offerings (ICOs) and shutting down crypto exchanges, worried about criminal activities like drug trafficking and money laundering.
Crypto giants like Binance had to pack their bags and leave, while traders found sneaky ways to trade via overseas platforms and VPNs. And in 2021, China dropped the hammer, banning crypto mining and declaring all crypto transactions illegal.
But here's the twist! Hong Kong, with its semi-autonomous status, is rolling out the red carpet for crypto. Operating under the “one country, two systems” principle, Hong Kong has set up a clear regulatory framework for the industry and is wooing global crypto players to set up shop in the city.
So, will China change its tune on crypto? With voices like Zhu’s urging a rethink and the global tide turning, who knows what’s next in this crypto drama? Stay tuned!
