China’s quest for blockchain dominance in the future of finance

As the global race for control over the future of money and finance intensifies, China has strategically positioned itself to assert dominance in the blockchain realm. Through a multifaceted approach, the Asian giant aims to exert influence on both the mainland and the Hong Kong Special Administrative Region.

This article explores China’s calculated moves in the blockchain space and their implications for the future of finance based on several facts put forth by industry experts.

China’s dualistic approach to crypto

Amid Beijing’s ban on global crypto networks within its borders, China is simultaneously developing and promoting its own next-generation monetary technologies. Related to this, the mainland has pushed for the establishment of a National Blockchain Research Center which aims to train 500,000 industry professionals. It is also actively testing the usefulness of the digital yuan in some of its key locations in an effort to accelerate its rollout.

These initiatives have the potential to give the Chinese Communist Party government more control over the financial landscape. Likewise, this dual approach allows China to maintain a tight grip on its domestic financial activities while exploring opportunities within the global crypto market.

Hong Kong: a strategic gateway

Exploiting Hong Kong’s potential as a special administrative region, China has built a significant presence in global digital asset markets. Hong Kong-based companies, even though their operations are tied to the US dollar, play an important role in establishing the region as a dynamic and thriving financial center for digital assets.

A prominent example is Tether, the globally known stablecoin, which further strengthens Hong Kong’s position in the free market digital asset ecosystem.

Embrace Open Blockchain Networks

China’s state-owned Bank of China recently issued debt on Ethereum through its Hong Kong-based investment arm. This move demonstrates China’s willingness to tap into open blockchain networks for its own purposes while maintaining control over its citizens’ financial activities.

By embracing these technologies, China aims to reap the benefits of blockchain while maintaining its sovereign control.

Encouraging banking services for crypto exchanges

Hong Kong regulators are pressuring major banks within their jurisdiction to provide banking services to crypto exchanges. This is in stark contrast to the situation in the United States, where many banks are reluctant to engage with crypto clients due to legal uncertainties.

The readiness of Hong Kong’s banking sector, exemplified by HSBC’s recent offering of Bitcoin and Ethereum ETFs to clients, demonstrates China’s commitment to facilitating the growth of crypto within its strategic gateway.