China Might Not Open its Doors to Crypto Just Yet

Paigambar Mohan Raj
Source: CoinDesk

China announced a ban on crypto in 2021, sending shockwaves throughout the industry. The ban was implemented in phases, and by September 2021, all crypto transactions came to a stop. Bitcoin’s hash rate fell within months, and Chinese crypto exchanges departed the nation.

On the other hand, Hong Kong, a Special Administrative Region of the People’s Republic of China, has been making many cryptocurrency-friendly moves in the last few months. Mainland China has also supported the region’s goal of becoming a crypto hub. Many prominent figures in the industry expected China to reverse its policy, given its support for Hong Kong.

Also Read: Hong Kong to Allow Retail Investors to Access Licensed Crypto Exchanges

However, investors’ hopes of China reversing its ban might face a disappointing end. The People’s Bank of China (PBOC) has named Pan Gongsheng as its senior communist party official. Gongsheng has long been vocal about his anti-crypto beliefs. The official famously said in 2017 that “If you sit by the river and watch, one day the corpse of Bitcoin will float in front of you.”

China wants blockchain-based CBDC despite the ban on crypto

David Qu, the China economist at Bloomberg economics, mentioned, “based on my knowledge, no PBOC governor would support Bitcoin.” The government is instead concentrating on building the digital yuan, and senior officials outside of the central bank are likewise skeptical of Bitcoin, Qu noted.

Recently it was reported that in the Jinan region in China, all bus routes have begun accepting digital yuan payments. The country has seen significant success in the CBDC (Central Bank Digital Currency) area. China’s CBDC program and pilot is one of the most advanced in the world right now.

Also Read: BNP Paribas to Link China’s Digital Yuan CBDC to Bank Accounts

According to a report by PwC China and Standard Chartered, China’s Greater Bay Area’s (GBA) adoption of programmable CBDCs may serve as a blueprint for other CBDCs.

China’s aim of pushing its CBDC forward is another reason why the country might not want to reverse its crypto ban policy. Investors and users might prefer more privacy-focused alternatives, than the communist part-backed digital yuan.