Source: South China Morning Post; Translated by: Wuzhu, Golden Finance
U.S. President-elect Donald Trump’s pledge to support the cryptocurrency industry could provide new impetus for mainland China to revive its digital asset market as technological competition between the two countries continues to escalate, a senior industry figure said.
“If the U.S. Congress and the (incoming) president clarify cryptocurrency policies, continue to legislate and promote the development of the industry, this will definitely become a driving force for China’s acceptance of (cryptocurrency),” Xiao Feng, chairman and CEO of HashKey Group, said in a statement.
Xiao Feng said that actions taken by Washington and its Western allies in 2022 to cut off Russia's access to the Swift financial messaging system as part of a package of sanctions aimed at forcing Moscow to abandon its invasion of Ukraine could also help convince Beijing to support the cryptocurrency industry.
“It may take five or six years from now for China to accept [cryptocurrency businesses],” he said. “But now, because of these factors, that time frame may be shortened to two years.”
Xiao Feng, Chairman and CEO of HashKey Group.
Xiao’s comments reflect the renewed enthusiasm for the cryptocurrency industry following the election of Trump, who vowed during his campaign to put the United States at the center of the digital asset industry, including creating a “National Strategic Bitcoin Reserve” and removing regulatory agencies considered anti-crypto.
Bitcoin surged above $81,000 on Monday, a new all-time high, and is up nearly 85% since the beginning of the year.
Despite this, the Chinese government has so far given no indication that it might relax its ban on digital assets. However, Beijing has let Hong Kong continue to develop its digital asset industry.
Xiao Feng said that if China wants to revive the development of the digital asset market, the country can start with a payment and clearing system based on regulated stablecoins, which are fixed-price cryptocurrencies whose market value is pegged to certain fiat currencies such as the U.S. dollar or the euro.
“Stablecoins are currently the best solution for cross-border business-to-consumer trade,” he said, citing fast transaction times and low fees as one of the reasons.
Xiao Feng said that HashKey’s team recently conducted a survey in Yiwu, a mainland manufacturing and trading center, and found that almost all merchants had received inquiries from buyers asking whether they could use popular US dollar stablecoins such as USDT and USDC for payment.
Xiao Feng’s insights are based on his experience in banking and finance before he got involved in digital assets: he served in senior positions at the Shenzhen Branch of the People’s Bank of China and the Shenzhen Regulatory Bureau of the China Securities Regulatory Commission. In 1998, he founded Boshi Asset Management, one of the largest fund companies in China, and was involved in the traditional securities industry.
He joined Wanxiang Group in 2011 and subsequently founded the group’s digital asset division HashKey in Hong Kong in 2018. HashKey operates HashKey Exchange, one of three licensed cryptocurrency exchanges in the city, as well as other cryptocurrency and blockchain businesses.
Xiao Feng said the company, whose business covers venture capital, tokenization and blockchain infrastructure solutions, expects to launch its own blockchain, HashKey Chain, next month.
HashKey has been expanding its business in Asia and other markets around the world. The company currently has about 300 employees at its headquarters in Hong Kong, 50 employees in Singapore and 11 employees in Tokyo. Xiao Feng said the company also has teams in Dubai, Bermuda and Europe.
Xiao Feng said HashKey remains committed to Hong Kong even as many cryptocurrency companies relocate to other jurisdictions such as Dubai and Singapore. “Only by staying in Hong Kong can we provide services to mainland China when it opens up,” he said. “We firmly believe that day will come.”
