Blockchain and Crypto have a complicated state in China: Beijing says not to cryptography but to blockchain. Prohibits trade but builds infrastructure.
Now, with Hong Kong offering regulated cryptographic markets, experts say that an escape is emerging.
If China already allows investors to buy US shares through its qualified national institutional investors program (QDII), why not Bitcoin? The key, an expert argued on stage in the consensus of Hong Kong, is control, and Beijing may have found a way to maintain it.
In China, there are two systems for continental investors to buy and sell shares outside of China. First, it is QDII, which allows selected investors to buy ETF from the USA. Uu. Using RMB.
Then, there is also the Shanghai-Hong Kong Connect and the Shenzhen-Hong Kong Connect, which allows Chinese investors to buy and sell Hong Kong shares through signatures of continental values, with all operations liquidated in RMB.
“The key [with these systems] It is that capital never flows freely outside of China, and if this same logic applies to cryptography, there is no reason for not working in the same way, “said Yifan He, CEO of Red Date Technology, on the stage of Consensus Hong Kong.
He stressed that the greatest regulatory obstacle is not cryptography in itself, but capital controls, ensuring that the funds do not move freely inside and outside China.
These capital controls are in their place, since they avoid excessive currency fluctuations and capital flight, to maintain the stability and value of the RMB. They are also one of the reasons why Hong Kong cryptographic ETF, with their reimbursements in kind, were not allowed in the continent.
“What is the difference between a stock regulated by Hong Kong and an active cryptographic regulated by Hong Kong?” He continued. “If you have a system to buy and sell in RMB, but never move money outside of China, then it is just another regulated investment product.”
This system would not allow Chinese investors to self -confidence their cryptography. Instead, purchases would be made through an intermediary, such as a licensed stock firm.
“They buy crypto directly, but it’s not as if they were holding it themselves,” he said. “The security company in the middle actually keeps it for you.”
This model is aligned with China’s approach for investments in shares and ETF.
Just as continental investors can exchange ETF in the US.
For a nation with 200 million retail investors and an economy that needs stimulus, access to regulated cryptography through Hong Kong Sandbox could offer Beijing a calculated commitment
Blockchain vs. Crypto
China has long been a Blockchain technology defender, while adopting a cold cryptography approach.
“We do not allow weapons in China, but we can still make steel,” he explained how analogy. “The technology is not regulated so that it can build all kinds of applications. But when some application triggers regulations, that is different.”
But according to their conversations with financial regulators, this could be changing.
“I see some signal of financial regulators,” he said. “They are beginning to talk about Bitcoin, saying that we need to pay more attention and investigate more about digital assets.”
Could this lead to broader adoption? Two years ago, he would have said ‘zero chance’.
“Now, I would say there are more than 50% possibilities in three years,” he concluded.
And you can take those probabilities to the Polymket.
