Hong Kong has been steadily promoting cryptocurrency adoption, with even some Chinese state-affiliated banks opening accounts to serve crypto clients in the region. CPIC Investment Management, a China government-backed firm regulated as a Hong Kong entity, has followed suit, launching two cryptocurrency funds in April. However, this is not an indication that mainland China is softening its anti-crypto stance, according to CPIC Investment Management CEO Chenggang Zhou.
In a recent interview, Zhou stated that Hong Kong’s efforts to promote Web3 technology and cryptocurrency should not be taken as a sign of change in mainland China’s regulatory approach. He highlighted that even though CPIC Investment Management is backed by the Chinese government, it operates as a Hong Kong entity regulated by the Securities and Futures Commission. Therefore, its involvement in the crypto sector is compliant with Hong Kong’s regulations, and not an indication of the Chinese government’s stance on cryptocurrency.
Mainland China has long maintained a strong anti-crypto position, and Zhou does not expect the local government to change its policies anytime soon. This sentiment is echoed by other experts like David Lesperance, founder of Lesperance & Associates. He believes that China will continue to clamp down on the financial sector and is unlikely to loosen its control over cryptocurrency use by its nationals.
Interestingly, Lesperance noted that China is keen to increase its foreign currency deposits, whether in fiat currencies to purchase crypto or in cryptocurrency itself. He suggests that the country is effectively bifurcating the markets, shutting out domestic Chinese customers while attracting foreign clients into its financial sector.
The continued crackdown on the crypto market in mainland China raises concerns about enforcement and the possibility of Chinese clients using Hong Kong exchanges to move money out of the country. Lesperance believes that the authorities will likely try to prevent this “leakage”.
Additionally, Zhou mentioned that crypto exchanges in Hong Kong have strict Know Your Customer (KYC) policies in place to restrict mainland Chinese investors from trading on their platforms. He expressed doubt that any licensed crypto exchanges in Hong Kong would accept onshore mainland citizens as traders.
In conclusion, while the cryptocurrency space has seen positive developments in Hong Kong and its regulations have allowed for investment in the sector, mainland China’s anti-crypto stance remains firm. Hong Kong’s advancements in cryptocurrency adoption and regulation should not be mistaken as a signal for change in mainland China’s approach or attitude toward crypto in the foreseeable future.
Source: Cointelegraph
