China Urged to Rethink Crypto Ban Amid US Policy Shift
A former Chinese finance official urges the government to rethink its strict crypto ban as the US adopts more favorable policies toward digital assets.
China should reconsider its strict ban on cryptocurrencies, says a former senior finance official, Zhu Guangyao. He emphasized the importance of digital assets for China’s digital economy during a recent forum in Beijing, according to the South China Morning Post.
Zhu's comments come as the U.S. adopts a more favorable stance toward crypto, sparking debate in China. He acknowledged that while virtual currencies pose risks like volatility and misuse for illegal activities, they could be managed through regulations rather than outright bans.
China first cracked down on crypto in 2017, banning initial coin offerings (ICOs) and closing crypto exchanges. In 2021, the restrictions were tightened further by banning Bitcoin mining and declaring crypto-related activities illegal. However, Zhu argues the existing ban has pushed trading underground, leaving it unregulated.
Meanwhile, Hong Kong is pursuing its own crypto strategy, aiming to become a global digital asset hub with tacit support from Beijing. The region approved crypto exchange-traded funds (ETFs) earlier this year, reflecting a contrasting approach within China.
The shift in global policy hasn’t gone unnoticed in the U.S. either. Former President Donald Trump has called for embracing digital assets to counter China’s influence, while Kamala Harris recently expressed support for innovative technologies, including cryptocurrencies.
Prominent Chinese economist Wang Yang criticized the mining ban, calling it “unwise” as it has shifted opportunities abroad, particularly to the U.S. He warned that if Trump were to return as president, China could face greater financial isolation.
Huang Yiping, a former policymaker at the People’s Bank of China, also questioned the sustainability of the ban, warning it could stifle China’s ability to leverage blockchain technology and digital innovation.
China now faces a critical choice: rethink its restrictive stance and join the digital asset race, or risk falling behind as cryptocurrencies gain global importance.
