Regulation
Crypto community riled over rumors of China lifting cryptocurrency ban
Cryptocurrency market participants are wondering if China’s Bitcoin ban could be lifted. With the significant progress in Hong Kong and other developments, speculation is rife that China could soften its stance on digital assets.
If China were to ease its restrictions, the global cryptocurrency market could see substantial changes, making this period a pivotal moment for digital assets worldwide.
What’s Triggering Speculation About China Lifting Crypto Ban?
Rumors Rumors are circulating within the crypto community that the Chinese government may reconsider its ban on Bitcoin and cryptocurrencies by Q4 2024. These speculations have gained traction on social media, particularly on X (formerly Twitter), where notable figures like Galaxy Digital CEO Mike Novogratz have expressed their curiosity.
“If this is true, and this is the second time I’ve heard it in a few weeks, this is a huge problem. Does anyone have any ideas?” Novogratz interrogates.
Learn more: Cryptocurrency Regulation: What Are the Pros and Cons?
One of the significant developments fueling these rumors is Justin Sun’s recent legal victory. In June, the founder of the TRON network won a defamation case before the People’s Court of China.
The court ruled in his favor against Chongqing Business Media Group, which had accused him of various illegal activities. Some interpreted Sun’s legal success as a sign of potential changes in China’s regulatory approach to cryptocurrencies.
Speculation Adds to Cryptocurrency Exchange Shift Bybit has announced plans to allow Chinese expats to open accounts and trade in June. The move aims to meet the growing demand for secure and user-friendly crypto trading solutions among the Chinese diaspora.
Bybit has reportedly simplified the registration and verification processes for users in China, a move some see as a harbinger of a possible softening of the country’s stance on cryptocurrencies.
Bitcoin and Ethereum Cash Approval Exchange Traded Funds (ETFs) in Hong Kong This April has further fueled speculation. These ETFs are available in several currencies, including the US dollar, Hong Kong dollar and renminbi. However, mainland China Chinese investors still banned to invest in these ETFs.
Underground Markets and High Volumes: China’s Hidden Cryptocurrency Scene
Hong Kong’s Efforts to Become a Cryptocurrency Hub and its unique relationship with China suggest a possible easing of the country’s restrictions on cryptocurrencies. Industry leaders have praised Hong Kong in particular for its clear regulation, suggesting a brighter future for digital assets in the region.
China began restricting cryptocurrency trading in 2017, banning banks and payment systems from dealing in digital assets. In May 2021, the People’s Bank of China (PBOC) declared all transactions involving Bitcoin and other cryptocurrencies illegal.
This comprehensive ban included mining, storage and use of cryptocurrencies. The reasons given were capital controls, financial stability and Promoting the digital yuan.
Despite these measures, citizens in mainland China have found ways to access cryptocurrencies. Reports indicate that some investors are using an underground network of brokers to obtain cryptocurrencies. Meanwhile, others are trading directly in public places, exchanging crypto wallet addresses and carrying out transactions in cash or by bank transfer.
Learn more: Why are Hong Kong Spot Crypto ETFs Important?
Value of cryptocurrencies received in East Asian countries. Source: String analysis
A report by Chainalysis revealed that between July 2022 and June 2023, the value of cryptocurrencies received in China reached $86.4 million. The report also highlighted that transaction volumes on centralized platforms and decentralized exchanges In China, transactions accounted for 73.5% and 20.5% of the global averages, respectively. These figures reinforce the idea that lifting China’s cryptocurrency ban could have significant repercussions on the market as a whole.
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