A professor on the Hong Kong College of Science and Expertise (HKUST) has questioned the logic of China’s cryptocurrency mining ban, suggesting that the federal government ought to embrace digital belongings amid geopolitical dangers.
Fully banning crypto mining in China was “very unwise” because it drove associated companies to the USA, 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 might have directed state-owned enterprises to take up shares in home crypto mining companies to manage dangers equivalent 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 most recent to query China’s hostile stance in the direction of cryptocurrencies, as Beijing continues its crackdown on the business 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 facet has forged a shadow over Hong Kong’s ambitions of turning into a digital asset hub, as some crypto exchanges have withdrawn their licence purposes within the metropolis.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 business have grown lately 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, regardless that Chinese language regulators have given no indication that they might enable 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 have been a breeding floor for felony exercise.
In late 2022, Chinese language economist Huang Yiping, a former member of the financial coverage committee on the Individuals’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 might lead to missed alternatives in applied sciences equivalent to blockchain. Such applied sciences are “very valuable” to regulated monetary methods, Huang stated on the time.
The potential for Hong Kong to be a gateway for crypto companies to entry the sizeable mainland China market was a serious theme at a bitcoin business convention within the metropolis earlier this yr.
Hopes that China would open its market to the cryptocurrency business have grown lately. Picture: Shutterstock Pictures alt=Hopes that China would open its market to the cryptocurrency business have grown lately. Picture: Shutterstock Pictures>
In an interview with the Publish final month, Brock Pierce, co-founder of the most important stablecoin Tether, steered that China’s opening up to crypto was a matter of “when” and never “if”.
Final week, HKUST’s Wang additionally floated the thought of tokenisation as a solution for China amid growing decoupling dangers. If former US president Donald Trump retakes workplace, China might be faraway from the Swift monetary messaging system or a minimum of 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 Publish (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 Publish Publishers Ltd. All rights reserved.
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