Is China opening up to cryptocurrencies? Rare political summit in Shanghai sparks market buzz
According to Reuters, the Shanghai State-owned Assets Supervision and Administration Commission (SASAC) met with local government officials on Thursday to discuss the regulation of stablecoins and digital currencies.
China has banned Bitcoin since 2021, so the summit with 60-70 participants may indicate a shift. Report: The regulator's director recommended that the assembly have 'greater sensitivity to new technologies and increased research on digital currencies.'
SASAC scheduled this meeting after internet giants JD.com and Ant Group pressured the Chinese central bank to legalize stablecoins in yuan, and Hong Kong plans to launch stablecoin legislation on August 1.
JD.com and Ant Group are among more than 40 applicants for a stablecoin license in Hong Kong. However, local media source Yicai predicts that only a few promising applicants would be approved.
Strict capital restrictions in China make it uncertain whether the Shanghai conference will yield results. The country banned cryptocurrencies in 2021. Concerns about the stability of the financial system halted trading and mining.
The country had half of the global Bitcoin mining capacity, or 'Hashrate', before the ban. Hashrate plummeted as miners shut down and relocated following news of crackdowns.
Although the ban initially harmed, Bitcoin's computing power recovered by 2022, indicating that the network bounced back quickly. The mining sector has since grown, and the global Hashrate is now five times higher than the pre-ban figure.
Cambridge reported earlier this year that 75% of Bitcoin mining activity is in the USA.
China may have banned cryptocurrencies, but the industry has grown abroad. Bitcoin surpassed another milestone after crossing $118,000, suggesting that the global trend may be too significant for the country to ignore.
