Donald Trump’s return to the White House is a turning point for the cryptocurrency world on the global stage. In fact, if you ask Xiao Feng, Chairman and CEO of Hashkey Group, he will tell you that Trump will literally force China to reconsider its strict ban on cryptocurrencies in just two years.💯
In an interview with the South China Morning Post, he said a crypto-friendly US administration “will definitely be a driving force” for Beijing to start accepting digital currencies.
There’s a lot more to this than just Trump’s policies. Xiao says one of the real wake-up calls for China came in 2022, when the United States and its allies pulled Russia out of the global financial messaging system SWIFT.
The move was a stinging blow to Russia, part of a package of sanctions designed to pressure the Kremlin to pull back from Ukraine. The message was clear: Countries that rely on centralized financial systems are vulnerable to the whims of foreign governments.
For China, watching the fallout from Russia’s SWIFT blockade was a lesson in financial independence—or rather, the lack thereof. Enter decentralized finance as a potential solution. Thanks to this lesson, Xiao believes China’s previous “five or six-year” timeline for allowing crypto could now be reduced to two years or even less.
China's tough stance on cryptocurrencies🌍🏛💯
For those familiar with China’s crypto policies, this prediction comes as a surprise. Beijing’s stance on crypto has been extremely harsh. Since 2017, the Chinese government has cracked down on crypto trading, initial coin offerings, mining, and more.🤍🧭
The official line? Cryptocurrencies pose a risk to financial stability, fuel criminal activity, and are a public headache they would rather avoid. This crackdown escalated in 2021 when the State Council stepped in to declare all cryptocurrency transactions illegal, effectively driving the industry out of the country.
Miners have decided to move their holdings elsewhere, while traders have turned to underground or offshore markets to stay in the game. The restrictions have been so severe that China is now one of the few places with a complete ban on all things cryptocurrency.
Despite this, interest in cryptocurrencies has not faded. Xiao’s predictions are based on the fact that demand for cryptocurrencies will not disappear anytime soon. While China sticks to its ban, Hong Kong — the semi-autonomous territory — has taken a different path.
The Hong Kong government has begun creating a framework to support cryptocurrencies and recently approved the launch of cryptocurrency exchange-traded funds.
Given Beijing’s tough approach, Xiao Feng sees stablecoins as the most likely path forward for China, saying they are “the best solution for cross-border trade between businesses and consumers right now.”
HashKey’s research highlights the demand for this type of payment solution. Xiao’s team recently conducted a survey in Yiwu, a major trading and manufacturing hub in mainland China, to gauge interest in digital payments.
The result? Foreign buyers have asked almost every merchant if they can pay with USD stablecoins like USDT and USDC. The interest is there — and the infrastructure is ready — the only thing missing is the green light from the government.
The Tense Past, Present and Future of Cryptocurrencies
China’s relationship with cryptocurrencies is complex and spans more than a decade. When Bitcoin first made headlines in 2011, the Asian giant quickly became one of the most active markets, with platforms like BTC China paving the way for crypto enthusiasts in the country.
By 2013, major companies like Baidu and Taobao were accepting bitcoin as a form of payment, despite the People’s Bank of China’s initial stance that bitcoin was not legal tender. The market flourished, but so did regulatory scrutiny.
Things changed dramatically in 2017 when China banned initial coin offerings, citing them as too risky for investors. In 2021, the crackdown intensified. All domestic cryptocurrency transactions were declared illegal, mining operations were shut down, and the country effectively pushed all cryptocurrency activity into the shadows.
This crackdown has prompted Chinese mining companies to set up shop in more lenient countries, leading to a massive “mining exodus.” However, despite these efforts, the underground crypto economy persists within China, with many investors turning to over-the-counter (OTC) trading to circumvent the restrictions.
