According to Hashkey Group CEO Xiao Feng, one of the leaders in the cryptocurrency space, openly supportive Trump administration, it changes the phase of China’s perception on Bitcoin (BTC) and other cryptocurrencies. In The South China Morning Post, Feng shared that US leadership from Trump and Congress would impact China’s crypto market policies greatly.
Trump’s Influence on China’s Crypto Policies
Xiao Feng is one of the highest-profile figures in the cryptocurrency industry and has been associated with Hashkey Group, one of the top blockchain and digital asset firms in the Asian region. Feng has been tracking the global landscape of cryptocurrency regulation for many years in the sector. He is optimistic that the crypto market in China will open up if the U.S. government decides to regulate digital assets more clearly and uniformly.
Instead, Feng explains that if the U.S. Congress and President Trump keep taking into positive strides on Crypto Laws, advocacy of innovation and legislation for the sector, it may cause China to second-guess its long-standing rigid stance towards digital currencies. This is due to what Feng believes: the markets interlink themselves worldwide, and anything the major economies take will eventually bring effects elsewhere.
In this regard, digital assets are now one of the crucial aspects of Trump’s presidential campaign in 2024. As one of the most influential figures in politics and the previous president, his words and actions carry much weight. Indeed, Trump had publicly rebuked the SEC in the United States, focusing on Chairman Gary Gensler in suppressing innovation in the crypto arena. Moreover, Trump wants to freeze the sale of Bitcoin grabbed by the U.S. government as a strategic asset. Feng comments that if such policies were implemented, China might be compelled to remove restrictions but change the nature of its approach towards cryptocurrency due to economic pressures.
China’s Historic Stance on Cryptocurrencies
China has always been strict in terms of regulation when dealing with issues like cryptocurrencies. In 2017, the country banned initial coin offerings. Recently in 2021, it fully prohibited the use and mining of cryptocurrencies in that country. These are just some of the various attempts by that country to control its financial system within itself while promoting their development of the digital currency called the digital yuan.
However, with this, Feng works according to not only his perception but also according to his knowledge of the changed financial policy adopted by China. According to him, due to the shift of the global economy to digital wealth, China needs to reassess its stand on cryptos. More economies are using blockchain technology more regularly; thus, it is very evident that China needs to reassess its current stand for it to catch up and maintain its position in the global financial system.
Stablecoins as a Bridge to China’s Crypto Market
For Feng, stablecoins are a bridge through which China can enter the digital asset space as Bitcoin and other cryptocurrencies continue to face regulatory challenges. These are digital currencies pegged to real-world assets to minimize volatility. That’s why regulators and businesses find them attractive.
Stablecoins would be the perfect answer for crossborder trade. “Stablecoins offer the best solution for cross-border business-to-consumer trade,” he explained. This is in tandem with the global trend wherein more and more stablecoins become used for cross-border transactions that are faster, cheaper, and much more transparent. Their utility in international trade can make them palatable to China, especially in areas where the adoption of digital yuan remains one of the topics for discussion.
Interest in stablecoins has increased significantly, particularly in economies experiencing any manner of inflation or instability in the currency. As of mid-2024, total capitalization of stablecoins is at about $165 billion in supporting trillions of dollars of transactions every year. Higher usage of stablecoins across the globe highlights its potential to become a means of reshaping international financial flows.
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