Executive states China’s position on cryptocurrency remains unaffected by developments in Hong Kong

Crypto Developments in Hong Kong: China’s Stance on Bitcoin Regulation

Despite Hong Kong’s progress in cryptocurrency adoption, mainland China has not changed its anti-crypto stance concerning local regulations. Recent developments in Hong Kong, such as Chinese state-affiliated banks opening bank accounts to serve crypto clients and CPIC Investment Management launching two cryptocurrency funds in April, do not indicate that China has softened or will soften its approach to regulating Bitcoin.

CPIC Investment Management CEO Chenggang Zhou stated that he does not expect the local government to change its crypto policies anytime soon. According to Zhou, Hong Kong regulations allow the firm to invest in different markets, asset classes, or products like cryptocurrencies without breaching any laws or regulations. Still, it does not mean that the Chinese government’s attitude or policy toward crypto has changed or will change.

Lesperance & Associates founder David Lesperance also believes that China’s anti-crypto stance remains unchanged. China wants to increase its foreign currency deposits, whether through fiat to purchase crypto or crypto itself, while shutting out domestic Chinese customers but attracting foreign customers. Lesperance also noted that the crypto market in mainland China is still effectively shut down, raising enforcement concerns about Chinese clients using Hong Kong exchanges to get money out of China. The crypto exchanges in Hong Kong have strict Know Your Customer policies that aim to restrict mainland Chinese investors on their platforms.

The Bottom Line

The recent crypto developments in Hong Kong do not mean that China has softened its approach to regulating Bitcoin. CPIC Investment Management CEO Chenggang Zhou emphasized that his firm’s involvement in crypto is due to Hong Kong’s regulations allowing them to invest in different markets and products like cryptocurrencies without breaching any laws or regulations. Experts like David Lesperance believe that China remains and will remain anti-crypto while trying to increase its foreign currency deposits.

Key Takeaways

• Crypto developments in Hong Kong do not mean that China has softened or will soften its approach to regulating Bitcoin.
• Mainland China has not changed its anti-crypto stance concerning local regulations.
• CPIC Investment Management CEO Chenggang Zhou stated that he does not expect the local government to change its crypto policies anytime soon.
• China wants to increase its foreign currency deposits, while shutting out domestic Chinese customers but attracting foreign customers.
• The crypto market in mainland China is still effectively shut down, raising enforcement concerns about Chinese clients using Hong Kong exchanges to get money out of China.