$BTC Is China Warming to Cryptocurrencies? A Rare Shanghai Policy Summit Stirs Markets

According to Reuters, the Shanghai State-owned Assets Supervision Commission (SASAC) met with local government officials on Thursday to discuss regulation of stablecoins and digital currencies.

China has banned Bitcoin since 2021, so the 60-70-person summit may signal a shift. A report said the agency's director advised the gathering of "greater sensitivity to emerging technologies and increased research into digital currencies."

SASAC scheduled this meeting after internet giants JD.com and Ant Group pushed the People's Bank of China to legalize yuan-pegged stablecoins, and Hong Kong plans to launch stablecoin legislation on August 1.

JD.com and Ant Group are among more than 40 applicants for stablecoin licenses in Hong Kong. However, local media sources such as Yicai expect only a handful of applicants to be approved.

China's strict capital controls make it uncertain whether the Shanghai conference will achieve results. The country banned cryptocurrencies in 2021. Concerns over the stability of the financial system led to a halt in trading and mining.

The country had half of the world's Bitcoin mining processing capacity, or "hashrate," before the ban. Hashrate fell sharply when mines shut down and relocated after hearing about the crackdown.