Why do China and the United States have completely different attitudes towards Bitcoin?
1. Differences in financial systems and regulation
United States: As a global financial center, the United States is relatively open to Bitcoin and other cryptocurrencies because they bring innovation and investment opportunities. The United States allows the legalization of cryptocurrency exchanges and has a dedicated regulatory framework to monitor transactions and prevent risks such as money laundering. The U.S. Securities and Exchange Commission (SEC) is also promoting the inclusion of Bitcoin exchange-traded funds (ETFs) in the regulatory system.
China: China's financial system is relatively closed, and the government has stricter control over capital flows. China's economic management focuses on maintaining financial stability and preventing systemic risks. Bitcoin is seen as a potential threat to capital control, monetary policy, and financial stability in China. Therefore, China has imposed strict restrictions on Bitcoin trading, mining, and other activities to ensure the stability of the monetary system and capital flows.
2. Capital control requirements
The United States: With a relatively free capital market, capital can flow globally, so the existence of Bitcoin does not pose a major threat to its capital control. Financial institutions and investors in the United States can freely choose to participate in the Bitcoin market.
China: Bitcoin’s decentralized and borderless nature may provide a channel for illegal capital outflows. To ensure that capital outflows are in line with policy guidelines, China has cracked down on cryptocurrency transactions and reduced the role of Bitcoin in capital inflows and outflows.
3. Monetary sovereignty and financial security
United States: Bitcoin is considered a digital asset, not a mainstream currency, and has little impact on the dominance of the U.S. dollar. The United States is open to the cryptocurrency market because its impact is limited and in line with the direction of innovation in the U.S. financial market.
China: China has a strict definition of digital currency, and Bitcoin and other decentralized cryptocurrencies are seen as a challenge to the sovereignty of legal tender. Therefore, China tends to promote the circulation of digital currency through the central bank digital currency (DCEP) to maintain the sovereignty and controllability of currency.
4. Different Emphasis on Blockchain Technology
United States: American companies and the government have shown interest in Bitcoin and blockchain technology itself, believing that its technological innovation and asset nature can bring long-term value. American companies use blockchain to develop applications in the fields of financial technology and payment, and the government hopes to balance innovation and regulation by formulating policies.
China: Although China has suppressed cryptocurrency transactions, it actively supports the development of blockchain technology. The Chinese government regards blockchain as a key technology to improve the efficiency of supply chain, trade finance and other fields, focusing on the innovation of blockchain in practical applications, but does not accept digital currencies such as Bitcoin.
5. Social stability and speculation
United States: Despite the volatility of the cryptocurrency market, its investors are highly educated and have a high risk tolerance, and the U.S. government is more focused on protecting the interests of investors rather than outright banning them.
China: China is concerned that the wave of speculation triggered by Bitcoin may affect family wealth security and social stability. Therefore, China has adopted a strong regulatory policy on the cryptocurrency market to prevent it from affecting financial order and social order.
Summarize
The difference in attitudes between China and the United States towards Bitcoin mainly stems from the different needs of the two countries' financial systems, considerations on monetary sovereignty, and concerns about social stability.