White House could drastically alter the global crypto landscape, potentially forcing China to lift its crypto ban within two years. Feng’s argument hinges on a crypto-friendly U.S. administration influencing Beijing to adopt digital currencies to stay competitive in decentralized finance.

Key Factors Driving the Prediction

1. Impact of U.S. Sanctions on Russia

Feng highlights the U.S. decision to remove Russia from the SWIFT financial system in 2022 as a wake-up call for China. This move showcased the vulnerabilities of centralized financial systems and underscored the strategic importance of decentralized finance (DeFi) as a means of achieving financial independence.

2. Growing Demand for Crypto in China

Despite the ban, demand for crypto remains strong within China. HashKey’s research in Yiwu, a key trade hub, revealed that many merchants are eager to accept stablecoins like USDT and USDC for cross-border transactions. This signals a latent demand for digital payment solutions that Beijing has yet to embrace.

3. Hong Kong’s Diverging Crypto Policies

While mainland China enforces strict crypto bans, Hong Kong has been exploring crypto-friendly regulations, including frameworks for trading and crypto ETFs. This divergence highlights the potential for broader adoption within Chinese-controlled territories.

4. Stablecoins as a Bridge

Feng suggests that stablecoins are the most realistic path forward for China, particularly for cross-border transactions. Their stability and utility in trade make them an attractive starting point for Beijing to reconsider its stance.

China's Current Crypto Landscape

Harsh Crackdowns: Since 2017, China has banned ICOs, crypto trading, and mining, citing risks to financial stability and crime prevention. The 2021 declaration of all crypto transactions as illegal solidified its hardline approach.

Digital Yuan Expansion: Instead of embracing decentralized cryptocurrencies, China has prioritized its central bank digital currency (CBDC), the digital yuan (e-CNY), which is tightly controlled by the state. The digital yuan has facilitated over $1 trillion in transactions as of October 2024.

Challenges and Opportunities

While China’s leadership remains wary of decentralized currencies, Feng believes that geopolitical and economic pressures—combined with the growing acceptance of crypto globally—might expedite its timeline for adoption. If the U.S. under Trump were to fully embrace crypto, the competitive pressure could nudge China to explore stablecoins and other decentralized solutions.

Ultimately, while lifting the ban within two years remains speculative, evolving market dynamics and international competition may push Beijing to reconsider its crypto po

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