As the U.S. races to establish itself as a global cryptocurrency hub, China may face pressure to adjust its policies. If China does relax its cryptocurrency ban, the global cryptocurrency market could be greatly impacted, opening up new avenues for investment and adoption across Asia. While it is uncertain whether the policy will be completely reversed, industry leaders such as Xiao Feng, CEO and chairman of Hong Kong-based HashKey cryptocurrency exchange, believe that a shift in China's cryptocurrency sector is increasingly likely, especially as major economies seek to tap into the industry's growth potential.
Feng’s comments fueled market speculation following Donald Trump’s victory in the U.S. election, with Trump’s victory particularly credited with driving a surge in cryptocurrencies around the world and sparking a new wave of interest in digital assets across Asia.
Is the Trump effect spreading in China?
Donald Trump’s pro-cryptocurrency agenda has ignited enthusiasm across the industry, with Bitcoin hitting an all-time high of $93,000 and the global cryptocurrency market capitalization recently surpassing $3 trillion. This “Trump effect” is driven by expectations that his policies will clear regulatory barriers to cryptocurrency in the United States, which could influence other countries, including China, to reconsider their own restrictive policies.
Feng believes that “if the U.S. Congress and the president clarify the cryptocurrency policy, this will be a driving force for China to accept cryptocurrency.” Although China currently prohibits cryptocurrency trading and mining, Feng believes that global events such as the U.S.-led sanctions against Russia may influence China to reconsider its decision. Due to these pressures, China may now accept cryptocurrency within two years instead of waiting five or six years.
Meanwhile, recent economic measures taken by China, including increased debt issuance and support for low-income citizens, have also fueled speculation. Some analysts believe these moves indicate that China may eventually relax its cryptocurrency policies. This economic shift, coupled with potential regulatory clarity in the United States, could make China's regulatory stance on cryptocurrencies more flexible in the coming years.
Encrypted Reactions
Overall, the entire cryptocurrency market has seen an upward momentum after the election. Bitcoin rose to a record high of $93,000 and altcoins surged, indicating growing confidence in the industry, which may further prompt China to reconsider its stance. HashKey CEO said that within two years, China may begin to relax restrictions on cryptocurrencies, in line with global bullish momentum.
Feng’s views come after Trump’s recent pledge to support the digital asset industry. During the campaign, Trump promised to fire SEC Chairman Gary Gensler and remove restrictive policies to protect cryptocurrency businesses. He also said that the U.S. might keep seized Bitcoin instead of selling it, indicating that the U.S. strongly supports cryptocurrencies. Feng believes that this shift in U.S. policy could serve as a “driving force” to encourage China to open its market to digital assets in the near future.
