Trump’s crypto support may see China restore digital-asset market, HashKey head says

HashKey chairman and CEO Xiao Feng said a number of factors may compel mainland China to open its digital-asset market in about two years

Reading Time:3 minutes

Beijing has so far given no indication of potentially relaxing its ban on cryptocurrencies, even as Donald Trump’s US election win renews enthusiasm among digital-asset proponents in China. Photo: Shutterstock

Published: 9:00am, 12 Nov 2024

US President-elect Donald Trump’s pledge to support the cryptocurrency sector could provide a fresh impetus for mainland China to revitalise its digital-asset market, according to an industry veteran, as tech competition between the two countries continue to escalate.

“If the US Congress and the [incoming] president make crypto policies clear, constantly legislate and promote the industry, it would certainly be a driving force for China to accept [cryptocurrencies],” HashKey Group chairman and chief executive Xiao Feng said in an interview with the South China Morning Post last week.

The action taken by Washington and its Western allies in 2022 to cut Russia off from the Swift financial messaging system – part of a package of sanctions aimed at pressuring Moscow to abandon its invasion of Ukraine – may also contribute to convincing Beijing to support the cryptocurrency sector, according to Xiao.

“China perhaps needed five or six years from the present to accept [cryptocurrency businesses] without these events occurring,” he said. “But now, because of these factors, that time frame could be shortened to two years.”

Beijing has maintained a strict ban on initial coin offerings, crypto trading and mining, and other businesses related to cryptocurrency over the past several years, as Chinese authorities consider this field as a threat to financial stability and a breeding ground for criminal activity.

HashKey Group chairman and chief executive Xiao Feng. Photo: Handout

Xiao’s comments reflect the renewed enthusiasm in the cryptocurrency sector after the election win of Trump, who vowed during his campaign to put the US at the centre of the digital-asset industry, including creating a “strategic national bitcoin stockpile” and remove regulators considered as anti-crypto.