“China would unlock Bitcoin with Trump in the White House”

During his election marketing campaign, Donald Trump promised to show the United States right into a paradise for bitcoin (BTC) and different cryptocurrencies, a purpose that if met, may set off alarm bells for the Chinese authorities, in the midst of the commerce conflict between the two international locations that the now president-elect unleashed in his first time period.

- Advertisement -

Hence, a number of analysts keep in mind a few of the phrases associated to the Asian nationwhich Trump stated in the center of his guarantees. Last July, when requested why he was all of a sudden embracing the cryptocurrency group, he responded: “If we don’t do it, China will pick it up and China will have it, or someone else, but most likely it will be China.” ».

These statements have served as a framework for the president and CEO of HashKey Group, Xiao Feng, to supply his impressions to the South China Morning Post newspaper, evaluating what is going to occur to cryptocurrencies in each international locations.

For Feng, though China banned cryptocurrency buying and selling and Bitcoin mining in 2021, Trump’s new entry into the White House may activate the curiosity of the Chinese authorities by cryptocurrency buying and selling and mining markets.

If the US Congress and the (incoming) president set clear crypto insurance policies, continuously legislate and promote the business, it’s going to actually be a driving power for China to simply accept (cryptocurrencies).

Xiao Feng, CEO of HashKey Group.

According to Xiao, the measure taken by the West in 2022 to isolate Russia from the Swift system – as a part of sanctions geared toward placing stress on Moscow for its invasion of Ukraine – could assist persuade Beijing to assist the cryptocurrency sector. This would additionally affect the de-dollarization course of that they’ve been selling these two international locations.

- Advertisement -

Additionally, he thinks that the chance of the United States gaining better power as a frontrunner in the Bitcoin ecosystem may mobilize the aggressive spirit of the Chinese.

And though to date the Chinese authorities has given no indicators that it’ll chill out the ban on Bitcoin, it attracts consideration to the incontrovertible fact that it has let Hong Kong transfer ahead with its opening to the digital asset business.

Based on this, he considers that Xi Jinping’s authorities may implement, in the future, a cost compensation system. based mostly on regulated stablecoins.

As CriptoNoticias reported, China was as soon as an necessary participant in the cryptocurrency market. Until 80% of bitcoin mining It was performed in mainland China a couple of years in the past. But in 2021, the authorities cracked down on cryptocurrency buying and selling and mining, and in July of that yr, Bitcoin mining had virtually disappeared from the nation.

Hong Kong would be the base of cryptocurrency operations

More than three years have handed since the ban. But a collection of speculations recommend that “China could be moving closer to cryptocurrencies and that Hong Kong would be a testing ground for these efforts,” as the Chainalysis staff commented final September.

In truth, in April 2024, the central authorities authorized the launch of a number of Bitcoin exchange-traded funds (ETFs) in Hong Kong. A incontrovertible fact that led some observers to say that China’s plan is to show Hong Kong right into a cryptocurrency hub, whereas sustaining the continued ban on transactions in mainland China.

At this level, the chief economist of Tressis, Daniel Lacalle, assures that “China made an enormous mistake by prohibiting the buying and selling and mining of cryptocurrencies, notably after they need to de-dollarize sooner or later. The resolution didn’t assist the yuan and eradicated an necessary disruptive technological improvement.

The concept is supported by Emiliano Pagnotta, affiliate professor of finance at the Singapore Management University, for whom “the 2021 mining offensive was a strategic mistake.” The measure led to them dropping in a short while a substantial proportion of hashrate earlier than the United States.

A Bitcoin adversary has rather more energy over the safety properties of the community by controlling the majority of the hashrate. That latent risk is rather more highly effective than the ban itself, which solely triggered a short lived drop in hashrate.

Emiliano Pagnotta, Professor Singapore Management University.

However, none of the analysts could be positive that China is regretting its resolution.

In that sense, Yikai Wang, assistant professor of economics at the University of Essex, doesn’t imagine that the authorities is complaining, “because the capital markets in China and Hong Kong are different.”

It thus infers that what the authorities seeks is to take care of strict management of capital outflows on the continent, and that’s the reason it prohibits cryptocurrency buying and selling.

That is why you see Hong Kong – an space managed by China, however with a free economic system – as the solely approach out that China has to enter into competitors with the United States, with out lifting the ban on Bitcoin.

“Hong Kong’s more flexible stance could be a strategic move to compete in the fintech and digital finance space without completely reversing its mainland policy,” says Zennon Kapron, founder and director of consultancy Kapronasia.

Trump may unleash the want for management

However, consultants think about whether or not Trump actually leads the United States to be a hub monetary for the bitcoin ecosystem, the Chinese authorities could also be pushed to compete with the United States on one other degree, eradicating some prohibitions for attempt to achieve energy.

Wang thinks that if it places its thoughts to it, China may nonetheless play an necessary function in the cryptocurrency sector. No surprise it’s at the moment one in every of the primary international locations transformed into “bitcoin whales.”

Despite this, analysts insist that, resulting from the decentralized nature of cryptocurrencies like bitcoin, “attempts at government control are meaningless.”