China is close to allowing cryptocurrency ownership again if several recent developments are taken into account. Major crypto exchange Bybit reportedly resumed registration and authentication of crypto users from the country even as the official government stance remains the same.
According to one popular crypto commentator, Cyclops on X, the authoritarian country is close to allowing Bitcoin in the country again. He also made lofty claims regarding the sudden impact on the coin market. As the influencer claims, a major appreciation is expected, but not by 100x.
China’s Blanket Ban on Crypto
China has had a love-hate relationship with the crypto sector since its inception in 2009. The country tolerated the development of the disruptive sector for around a decade, but the digital currency sector was never officially legal in the country. Bitcoin’s allure is considerable, and it has found a way to appeal to Chinese users, who have become one of the biggest adopters of the crypto revolution.
However, following the major altcoin boom of 2017, the country began to crack down against digital currencies. At first, it banned Initial Coin Offerings (ICOs) and blacklisted certain exchanges from operating in the country. Before this action by the government, China was the dominant player in the crypto market, with the largest share in BTC mining.
Due to this sudden antagonistic policy towards crypto, the sector has declined ever since. At first, the mining operations slowed considerably before the government banned them entirely in 2021. This led to a major exodus of large miners who eventually found their way to the USA and certain Central Asian countries with cheap electricity.
The Future
China still has a large, enthusiastic crypto community, but virtually everything they do, from using Bitcoin to NFTs to programmable public blockchains, is illegal and punishable by imprisonment. The country’s justice system has dealt an iron hand to several high, low-profile Chinese crypto users, but even that hasn’t stopped them.
Many underground Chinese crypto adopters are waiting for a change in government policy so they can resume their steady commitment to the sector openly instead of operating in the shadows. The recent resumption of registration of Chinese users on the Bybit crypto exchange could result in a reversal of this authoritarian policy.
One idea is to allow mainland Chinese users to invest in crypto via ETFs and crypto exchanges based in Hong Kong, which is part of China but ruled separately. Crypto is legal in Hong Kong. It has spearheaded the development of the digital currency space with several top exchanges like Bitfinex and Binance originating from the nation.
