If U.S. President-elect Donald Trump will support digital assets, it may lead to China changing their restrictive crypto perspective, HashKey Group Chairman Xiao Feng has said, saying that this could take place November 12, 2024.
Asked if Trump’s plans to bring the U.S. to the forefront of cryptocurrency innovation could speed up Beijing’s thinking about the crypto sector, Xiao said it could be the case. Although China prohibited its cryptocurrency trading, mining, and initial coin offers (ICOs), the redirection seems imminent due to a changing geopolitical and economic environment.
“China perhaps needed five or six years from the present to accept [crypto businesses] without these events occurring. But now, because of these factors, that time frame could be shortened to two years.”
Xiao Feng
Trump Aims to Make U.S. Crypto Capital
A Trump administration has promised policies to break down barriers for digital asset innovation, pledging to make the U.S. the ‘crypto capital of the planet.’ This is a game changer, as Xiao sees it, for China, which has held cryptocurrencie in high regard as a destabilizing factor to its financial system.
He also pointed to how geopolitical factors will continue to shape China’s presence. Alternative financial systems have been on display since the U.S.-led sanctions on Russia after its invasion of Ukraine. An increasingly vigorous U.S. crypto stance, Xiao argues, could help prod the current closed-minded Chinese government into a more permissive stance as well.
But China has so far offered no indication it’s going to loosen its strict crypto policies, despite the potential for those pressures. In line with its ambition to strangle financial independence, the country is still fixated on its state digital currency, the digital yuan.
A central bank digital currency (CBDC) payment card was recently introduced by China. This innovative card is just like a standard debit or credit card but allows for payments via a dynamic QR code, which updates balance in real time. The development saw Beijing doubling down on its backing of its CBDC and ensuring the tight rein it has on decentralized cryptocurrencies.
If Xiao’s prediction turns out to be correct, this could mean a shift in China’s policy and have a very real effect on the global crypto market. The world’s second-largest economy would also create a more favorable regulatory climate for investors and developers who had to leave China after its crypto crackdown.
We watch in the crypto world as this sees the U.S. innovation square off against Chinese policy. The beginning of a new chapter for the global crypto race could likely be started by Trump’s administration, which would take office in January 2025, and China may reevaluate its stance to keep pace with other countries in the technology and finance space.
The implications of developments such as these could be widespread in cryptocurrency and geopolitics, a topic to which development watchers should keep their eyes on for the foreseeable months to come.
