Is China Reconsidering Its Stance on Cryptocurrency?
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Shanghai Authorities Delve into Crypto Discussions
In a surprising development, the Shanghai State-owned Assets Supervision and Administration Commission (SASAC) convened with local government representatives to deliberate on policies regarding stablecoins and digital currencies. As per reports from Reuters, this assembly marks a potential shift in China’s rigid crypto policies, which have been in place since the 2021 ban.
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The meeting saw the participation of approximately 60-70 individuals, suggesting a potential reevaluation of China’s approach to digital assets. The director of the commission emphasized the significance of being attuned to new technological advancements and the importance of in-depth research on digital currencies.
Pressure from Tech Giants and Legislative Changes
This discussion follows appeals from major corporations such as JD.com and Ant Group, urging the People’s Bank of China to sanction yuan-based stablecoins. Concurrently, Hong Kong is on the verge of implementing its stablecoin regulations, set to commence on August 1st.
Both JD.com and Ant Group are among over 40 entities aspiring for stablecoin licenses in Hong Kong. However, local media outlet Yicai suggests that only a few of these companies are likely to receive approval.
Challenges and the Future of Crypto in China
Despite the recent meeting in Shanghai, the path forward remains uncertain given China’s stringent capital controls. The country’s 2021 prohibition on cryptocurrency activities, including trading and mining, was driven by concerns over financial system stability.
Before this ban, China was a powerhouse in Bitcoin mining, contributing half of the global Bitcoin mining power or “Hashrate.” The crackdown caused a significant decline in Hashrate as miners relocated operations. However, by early 2022, Bitcoin’s computing power had rebounded, indicating a resilient recovery despite the initial setback.
Remarkably, the global Hashrate has since surged to a level nearly fivefold higher than before the ban. According to a recent Cambridge report, the United States now leads, accounting for 75% of all reported Bitcoin mining activities.
The Global Crypto Landscape Flourishes
Although China has distanced itself from cryptocurrency, the sector continues to prosper worldwide. Bitcoin recently achieved a new milestone, surpassing the $118,000 mark, which may compel China to reconsider its stance in light of the unstoppable global momentum.
Bitcoin’s Bullish Momentum Reaches New Heights
Bitcoin recently achieved a new all-time high, with its value soaring over 6% in just one day. This surge has sparked a wave of enthusiasm across the crypto market, with Ethereum (ETH) and XRP (XRP) posting even greater gains than Bitcoin.
Such substantial market movements have resulted in over $1.1 billion in short liquidations within the derivatives market, as reported by CoinGlass.
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