China’s former dominance in the crypto space took a dramatic turn in 2021 when the nation imposed a ban on cryptocurrency mining and trading. This move significantly altered the global crypto landscape, causing a widespread exodus of miners and exchanges from the country. Despite persistent rumors about a possible policy reversal, particularly given Hong Kong’s progressive stance towards digital assets, mainland China has remained firm in its position.
However, Wang Yang, Vice President of the Hong Kong University of Science and Technology, believes that China’s rigid approach might change if former President Donald Trump wins the upcoming U.S. election. Speaking at the Hashkey New Horizons event on June 26, Yang criticized China’s crypto ban, labeling it a “mistake.” He argued that the ban had redirected an estimated $4 billion in tax revenue to the U.S., money that China could have retained.
Wang suggested an alternative approach, stating, “It is better to let state-owned enterprises mine or state-owned enterprises buy shares to ensure risk control,” rather than enforcing a total ban. He added that Trump’s potential return to power could pressure China to reassess its stance on cryptocurrencies.
In recent weeks, Trump has amplified his support for the U.S. crypto industry, a strategy seemingly designed to attract crypto voters as the presidential race heats up. His campaign has made several high-profile moves to bolster his position as a pro-crypto candidate. Notably, Trump is slated to deliver a keynote speech at the Bitcoin Conference 2024 in Nashville, Tennessee, scheduled for July 25–27.
Earlier this month, Trump used Truth Social to express his vision of the U.S. leading in Bitcoin mining. He also reportedly held meetings with mining industry executives to discuss energy policies that would support this goal. Trump’s statements and actions indicate a clear intent to foster a robust crypto ecosystem in the U.S., a stance that could influence global crypto policies, including those of China.
Despite its 2021 ban, China still holds 21% of the Bitcoin hash rate, suggesting significant underground mining activities. The U.S., meanwhile, has become the largest Bitcoin mining country, accounting for approximately 38% of the global hash rate. This shift underscores the ongoing influence of China in the crypto space, even as it officially shuns the industry.
The speculation surrounding a potential policy U-turn in China is further fueled by figures like BitMEX co-founder Arthur Hayes, who interprets Hong Kong’s pro-crypto stance as a precursor to a broader change in mainland China.
Wang’s critique highlights the complex interplay between politics, economics, and cryptocurrency. As global leaders navigate their crypto policies, the decisions made today will likely shape the economic landscape for years to come. If Trump’s crypto-friendly rhetoric translates into tangible policy changes, it may well pressure China to reconsider its hardline stance and re-enter the crypto arena.
