Loosening of the Chinese crypto ban: hopes increase, but experts remain skeptical

Von Krypto News Österreich

The ban on Bitcoin & Co. in China caused a sensation in September 2021. Transactions with cryptocurrencies were declared illegal and Bitcoin mining was prohibited. In the meantime, however, there is speculation about an early end of the Chinese crypto ban. But how realistic are these hopes?

Some experts in the crypto community believe that the Chinese government will allow the trade with Bitcoin, ether and other cryptocurrencies again in the near future. Cameron Winklevoss, co-founder of Gemini, even assumes that the "next Bitcoin Bullrun will start in the Far East". Justin Sun, advisor to the Huobi exchange, and Jeremy Allaire, CEO of Circle Internet Financial, also see Hong Kong's Pro-Crypto-friendly policy that China could loosen his restrictive approach to cryptocurrencies. Such loosening would certainly give the cryptocurrencies up.

However, there are also several aspects that speak against this optimistic reading. The appointment of Pan Gongsheng as the top official of the Chinese central bank shows that Hong Kong's crypto -friendly policy cannot simply be transferred to Beijing. Pan is considered a decisive opponent of Bitcoin, even within the China Communist Party. Already in 2017 he expressed derogatory about Bitcoin and was instrumental in the regulatory measures against cryptocurrencies that were issued by the Chinese central bank. Nevertheless, Bitcoin continues to be taken in China, but the importance of China for the global crypto market has recently decreased. Should Pan actually become the new Chairman of the Chinese Central Bank, it is unlikely that he would allow cryptocurrencies trade again.

The China's Communist Party generally distrusts cryptocurrencies. The Chinese government is actively working on the development of a digital central bank currency, the E-Yuan. The E-Yuan differs from decentralized cryptocurrencies such as Bitcoin, since it does not evade the control of the Communist Party and can be designed according to his own ideas. According to Bloomberg, the potential hollowing out of the central power was one of the main reasons for the crypto ban. In addition, money laundering, environmental impact of Bitcoin mining and currency drains were mentioned as reasons for the crypto aversion of the Chinese officials.

Adrian Lai, founder of Newman Capital and active in the Hong Kong crypto hub, believes that the basic rejection of Bitcoin & Co. on the part of the Chinese government will not change. "It is typical of Chinese officials to take anti-bitcoin posture," said Lai. Therefore, he considers a loosening of the Chinese crypto ban to be unlikely. However, the ban on decentralized cryptocurrencies does not mean that China rejects all digital innovations, as the opening of a blockchain research center shows.

In summary, it can be said that the hopes for a loosening of the Chinese crypto ban are quite understandable, but are also accompanied by some hurdles. Hong Kong's crypto -friendly policy is not easily transferred to the Chinese mainland, since there is a rejection of cryptocurrencies. The development of the E-Yuan shows that the Chinese government is working on its own digital currency that can control and design it. A loosening of the crypto ban in China is therefore unlikely, although the country continues to invest in blockchain technology.