A professor on the Hong Kong College of Science and Know-how (HKUST) has questioned the logic of China’s cryptocurrency mining ban, suggesting that the federal government ought to embrace digital belongings amid geopolitical dangers.
Utterly banning crypto mining in China was “very unwise” because it drove associated companies to america, which contributed to US tax revenue, Wang Yang, vice-president for institutional development and chair professor on the Division of Arithmetic at HKUST, stated throughout a panel dialogue in Hong Kong final week.
China may have directed state-owned enterprises to take up shares in home crypto mining corporations to manage dangers comparable to capital outflows and cash laundering, Wang stated on the occasion on June 26, hosted by Hong Kong digital asset agency HashKey Trade.
Wang is the newest to query China’s hostile stance in direction of cryptocurrencies, as Beijing continues its crackdown on the trade on the mainland regardless of supporting Hong Kong’s efforts to develop the sector.
HKUST vice-president for institutional development, Wang Yang. Picture: Handout alt=HKUST vice-president for institutional development, Wang Yang. Picture: Handout>
The strict strategy on the mainland aspect has forged a shadow over Hong Kong’s ambitions of turning into a digital asset hub, as some crypto exchanges have withdrawn their licence purposes within the metropolis.
Hopes that China would open its market to the cryptocurrency trade have grown in recent times because the particular administrative area of Hong Kong made strikes to construct a digital asset sector. The efforts included licensing crypto exchanges and launching exchange-traded funds that make investments straight into cryptocurrency tokens, although Chinese language regulators have given no indication that they might permit the identical on the mainland.
After banning preliminary coin choices and ordering the closure of exchanges in 2017, the Chinese language authorities went even additional by banning bitcoin mining in 2021 and declaring all cryptocurrency-related companies unlawful, saying they disrupted financial and monetary order and had been a breeding floor for prison exercise.
In late 2022, Chinese language economist Huang Yiping, a former member of the financial coverage committee on the Folks’s Financial institution of China, stated in a speech that China ought to think about whether or not its inflexible cryptocurrency ban was sustainable in the long term because it may lead to missed alternatives in applied sciences comparable to blockchain. Such applied sciences are “very valuable” to regulated monetary techniques, Huang stated on the time.
The potential for Hong Kong to be a gateway for crypto corporations to entry the sizeable mainland China market was a significant theme at a bitcoin trade convention within the metropolis earlier this yr.
Hopes that China would open its market to the cryptocurrency trade have grown in recent times. Picture: Shutterstock Pictures alt=Hopes that China would open its market to the cryptocurrency trade have grown in recent times. Picture: Shutterstock Pictures>
In an interview with the Submit final month, Brock Pierce, co-founder of the biggest stablecoin Tether, prompt that China’s opening up to crypto was a matter of “when” and never “if”.
Final week, HKUST’s Wang additionally floated the concept of tokenisation as a solution for China amid growing decoupling dangers. If former US president Donald Trump retakes workplace, China may very well be faraway from the Swift monetary messaging system or at the very least face restrictions, Wang stated.
“If that’s the case, the market could open up,” Wang stated. “I think there will be a breakthrough within three years, when people reconsider what digital assets are, and whether it’s harmful.”
This text initially appeared within the South China Morning Submit (SCMP), essentially the most authoritative voice reporting on China and Asia for greater than a century. For extra SCMP tales, please discover the SCMP app or go to the SCMP’s Fb and Twitter pages. Copyright © 2024 South China Morning Submit Publishers Ltd. All rights reserved.
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