1 year ago
Former BitMEX CEO Arthur Hayes posted an extended Medium article titled “Comeback.”
It went into extent connected the analyzable narration betwixt China and Hong Kong and however helium is hopeful that the second tin reconstruct its crypto hub standing. If so, what mightiness this mean for the broader crypto market?
China’s anti-crypto stance
China’s crypto crackdown has a agelong history, with Beijing often announcing anti-crypto measures that determined locals skirted.
Some speculate that Tether’s emergence successful popularity tin beryllium attributed to the halt of crypto-to-yuan — and vice versa — exchanges. Hayes alluded to this successful the Medium post, writing:
“Crypto exchanges needed a mode to money successful USD without touching the banking system. And likewise, Chinese radical needed a mode to nonstop dollars astir the satellite without involving banks.”
However, things took a decisive code successful May 2021 arsenic authorities reiterated erstwhile trading bans and prohibited fiscal institutions from dealing with integer assets.
June 2021 saw a prohibition connected crypto mining, starring to a wide exodus of miners implicit the coming months to much accommodating jurisdictions.
The last decease stroke came successful September 2021 erstwhile The People’s Bank of China (PBoC) made crypto transactions amerciable and forbade exchanges from serving Chinese citizens.
The PBoC notice spoke of the request to curtail the amerciable and transgression activities resulting from integer plus trading to support nationalist information and societal stability.
“Virtual currency trading hype activities person been connected the rise, disrupting the economical and fiscal order, breeding amerciable and transgression activities specified arsenic gambling, amerciable fundraising, fraud, pyramid schemes, and wealth laundering, earnestly endangering people’s spot safety.“
Hayes said with the mainland’s crackdown connected crypto, Hong Kong became a “less affable place” for integer assets. As its crypto hub presumption diminished small by little, Beijing’s zero-covid policies accelerated the matter.
Hong Kong wants crypto hub presumption back
Nonetheless, according to Hayes, “Hong Kong wants crypto back.” And, arsenic helium laid retired successful the Medium post, “Hong Kong is the proxy done which China interacts with the world.”
“Hong Kong (a deepwater larboard astatine the rima of the Pearl River Delta) has ever been China’s model to the world. Whether it was shipping, capital, oregon narcotics supplied by the biggest cause trader successful quality past (the British Crown,) Hong Kong has historically been wherever China and the West met.”
On Oct. 17, Elizabeth Wong, the U.S. Securities and Futures Commission’s caput of fintech, said the regulator is considering allowing retail traders to put straight successful crypto.
Under existing rules, lone nonrecreational traders tin put successful cryptocurrencies – defined arsenic individuals with a portfolio of astatine slightest HK$8 cardinal (US$1.02 million).
If enacted, retail information successful Hong Kong would gully a wide favoritism betwixt the mainland’s policies connected the matter. Thus demonstrating the “one country, 2 systems” argumentation that Hong Kong lawmakers often tout.
Despite Hong Kong’s multiparty antiauthoritarian governmental system, Beijing’s betterment of legislative elections makes it hard for anti-China candidates to instrumentality bureau astatine the highest levels. With that, it is just to accidental what happens successful Hong Kong indispensable beryllium approved by China first.
Taking into relationship the proxy narration with Hong Kong, Hayes ponders whether this is simply a motion that China is trying to claw backmost the crypto dominance it threw distant past year.
If so, the implications for the broader crypto marketplace could beryllium far-reaching successful presumption of catalyzing bullishness. Hayes said:
“When Choyna [sic] loves crypto, the bull marketplace volition travel back. It volition beryllium a dilatory process, but the reddish shoots are budding.”
The station Is China astir to catalyze the crypto bull marketplace done Hong Kong? appeared archetypal connected CryptoSlate.
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