China's former Minister of Finance, Zhu Guangyao, recently urged Beijing to pay closer attention to cryptocurrencies during a speech at a summit hosted by Tsinghua University.
Zhu emphasized the need for the government to recognize the risks and potential harm that cryptocurrencies pose to capital markets, but also highlighted the importance of
studying the latest international changes and policy adjustments, because cryptocurrencies are the most vital aspect to the development of digital economy.
Zhu cited the United State's change of rhetoric in relation to crypto - the US had focused on the challenges that cryptocurrencies may bring to international anti-money laundering and counter-terrorism financing efforts, and to international capital markets. However, the US's stance had changed significantly this year, especially in light of remarks made on the US campaign trail.
Zhu pointed directly at comments made by Republican candidate Donald Trump as a reason for further action by Beijing. At the Bitcoin Conference in Nashville in July, Trump stated that the U.S. must fully embrace the crypto industry, warning that if America does not take the lead, China will.
Trump compared the crypto industry to the steel industry of a century ago, predicting that it might one day surpass gold:
One day, it probably will overtake gold. There's never been anything like it.
Zhu also noted that despite initial opposition, the U.S. Securities and Exchange Commission had approved Bitcoin and Ether exchange-traded funds (or ETFs).
The state of cryptocurrency is interesting in China. While mainland China remains cautious about cryptocurrencies and has placed a ban on them, the government has continued to make forays into digital asset by launching its own NFT marketplace, building a new blockchain network and issuing a retail central bank digital currency.
On the other hand, Hong Kong has taken a more welcoming stance in recent years, establishing a licensing framework for virtual asset service providers, promulgating regulations for stablecoins and tokenisation, listing Bitcoin and Ether ETFs and actively encouraging the industry to set up operations in the city.
Written by J Huang and S Pettigrove
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