The Chinese government, which took a stringent stance against cryptocurrency operations in 2021, causing a mass migration of mining activities primarily to the United States, is now looking to delve deeper into blockchain research and cryptocurrency regulation. This shift is partly in response to the country’s carbon emission goals which previously led to a crackdown on crypto mining. Notwithstanding the past repressive measures, the political milieu has not fully embraced a complete ban on cryptocurrencies.
Legislative Proposals Targeting Blockchain and Crypto
Yuan Xiaobin, a prominent figure in the Chinese legislature, has advocated for more intensive research in the blockchain sector. According to Yuan, there is a need for legislation that provides clear legal guidance and a supportive policy environment for emerging technologies, including blockchain. Asia’s well-known crypto journalist WuBlockchain relayed that legislators have proposed a focus on accelerating legislation and conducting research on cryptocurrencies to bolster technological innovation.
Despite the historical aversion to cryptocurrencies, there is a recognition of the surging demand for crypto in Asia. This is exemplified by Hong Kong’s recent move to allow individual cryptocurrency trading platforms to operate, which has led to a resurgence in the crypto market since June last year.
Revisiting China’s Stance on Cryptocurrency Mining
China has witnessed times when informants on cryptocurrency mining operations were incentivized, reflecting the severity with which the country sought to curtail such activities. The official stance was to phase out crypto mining to align with energy conservation and carbon neutrality objectives. Ironically, the nation’s coal consumption has increased for energy production. Despite the bans, demand for cryptocurrencies in the region remains robust, and Hong Kong’s open policy towards crypto investments by individual investors has attracted many Mainland Chinese businesses to establish a presence and invest through this autonomous region.
Overall, the political narrative in China appears to be gradually shifting towards a more research-based and regulated approach to dealing with cryptocurrencies, potentially fostering a new era of growth for Asia-driven crypto markets.