A recent meeting in Shanghai hints at a possible shift in China’s strict anti-crypto policy. Let’s dive into the details.
Shanghai’s Crypto Chat
The Shanghai State-owned Assets Supervision and Administration Commission (SASAC) held a meeting to discuss stablecoins and digital currencies. Around 60-70 government officials attended this unusual gathering. This is significant because China banned crypto in 2021.
The meeting’s focus was on the need for better understanding of new technologies like digital currencies. This push for research seems to be driven by several factors:
- Pressure from Tech Giants: Companies like JD.com and Ant Group have reportedly asked China’s central bank to allow yuan-based stablecoins.
- Hong Kong’s Move: Hong Kong is set to introduce its own stablecoin regulations in August, attracting many companies including those from mainland China. Over 40 companies are planning to apply for licenses there.
However, even with this meeting, significant hurdles remain. China’s strict capital controls pose a major challenge.
China’s Crypto Crackdown and the Global Boom
China’s 2021 crypto ban shut down both trading and mining activities. At the time, China was responsible for half the world’s Bitcoin mining. The ban initially caused a significant drop in Bitcoin mining activity (hashrate), but the network quickly recovered. In fact, global Bitcoin mining has exploded since then, with the US now accounting for a whopping 75% of all reported activity.
Bitcoin’s Record High and China’s Dilemma
Bitcoin recently hit a new all-time high, exceeding $118,000. This surge, along with similar gains in other cryptocurrencies like Ethereum and XRP, might be putting pressure on China to reconsider its stance. The massive global growth in the crypto market could be too significant for China to ignore completely.
