Should China Rethink Its Strict Crypto Ban as the U.S. Embraces Digital Assets?

Zhu Guangyao urged the government to reconsider its strict crypto ban, especially as the US adopts more favourable policies towards digital assets.

Speaking at a forum in Beijing, Zhu highlighted the importance of cryptocurrencies to China’s digital economy, noting that the risks associated with them – such as volatility and illegal use – can be managed through regulations rather than an outright ban.

China initially cracked down on cryptocurrencies in 2017, banning initial coin offerings (ICOs) and shutting down exchanges. By 2021, restrictions were further tightened by banning Bitcoin mining and outlawing crypto-related activities.

However, Zhu argues that these measures have driven crypto trading underground, creating an unregulated space.

Meanwhile, Hong Kong is taking a different approach, seeking to become a global hub for digital assets with Beijing’s tacit support, having recently approved crypto exchange-traded funds (ETFs).

China now faces a critical decision: whether to maintain its restrictive stance or accept the growing global importance of cryptocurrencies.