According to certain rumors, China has once again banned cryptocurrencies. In addition to the unfounded nature of these claims, we will see that the reality is more subtle than it appears.
No, China has not banned cryptocurrencies again
In recent days, rumors have been spreading on social media that China has (once again) banned cryptocurrencies. To put it simply, the answer is no, but it may be worth looking at the issue in a little more detail.
Firstly, it should be noted that these rumors appear to be nothing more than recycled old news, such as the famous mining ban in 2021, and that at present, these alleged new measures have not been confirmed by the Chinese government or reported by leading media outlets.
On the subject of mining, journalist Colin Wu points out that Bitcoin mining “is still practiced in many parts of China” and that, contrary to what has been claimed, “China has never banned individual crypto transactions; it only prohibits institutional participation.”
Furthermore, the journalist points out Hong Kong’s status as a pilot zone, and it is true that in recent years we have seen a growing openness in this special administrative region. While Hong Kong enjoys a certain degree of autonomy, it is in fact a major commercial port for China in the West, and its blockchain initiatives are by no means coincidental.
On this point, it should be noted that since April 30, 2024, Bitcoin (BTC) and Ethereum (ETH) spot ETFs have been available for trading in Hong Kong, currently totaling the equivalent of $489.47 million and $86.45 million in net assets:
Of course, the amounts involved remain well below those of their US competitors, which have $146.48 billion and $20.11 billion in assets under management, respectively, which still corresponds to multiplication factors of around 300 and 233.
On the other hand, Colin Wu also highlights ongoing work on stablecoins and the tokenization of real-world assets (RWA) in China, while earlier in July, we even reported on the potential arrival of USDC on the platform of giant Ant Group.
Thus, China seems to be cautiously reversing its past bans rather than strengthening them, so as not to fall behind other world powers, although a firm stance does not yet appear to be on the agenda.
