Is China about to ease its stance towards bitcoin and other cryptocurrencies? This is the sentiment of Circle founder Jeremy Allaire, who says that the country could potentially become one of the bigger players in the digital currency market.
Allaire Says the “Stance Is Softening”
To say that China has had a mixed relationship with virtual money would be an understatement. The country has outright banned digital currency exchanges and initial coin offerings (ICOs) and is also debating whether to rid itself of bitcoin mining practices due to the potential hazards they present to the environment. However, this is something the country has been going back and forth on for quite some time, and it’s unclear if regulators plan to take official action.
That said, bitcoin is not particularly popular amongst Chinese legislators, which is odd considering how much money it’s earned from bitcoin mining and similar practices. Bitmain and several other bitcoin mining enterprises have made their homes within China’s borders, though it’s been argued that China is potentially looking to release its own digital asset within the next few years, and it doesn’t want bitcoin around to disrupt its plans or bring on bouts of heavy competition.
China has taken a hardened stance against virtual currency since 2017, though recently, the country’s federal court system recognized bitcoin as digital property. From there, the state-initiated Bank of China began submitting marketing materials centered on bitcoin and digital currencies.
We have been seeing, from my vantage point, a softening in the Chinese stances towards crypto… There is a lot of Chinese national participation in this market. There are many large offshore exchanges.
One of the reasons for this change could be the growing, global interest in crypto. At the same time, it’s not off-key to assume that China is looking at cryptocurrencies like bitcoin as a way of offsetting the ongoing trade war between itself and the United States.
Recently, U.S. President Donald Trump invoked several billion dollars-worth of tariffs on imported Chinese goods. Trump has commented that China cannot continue to dominate the global market the way it does, as this presents serious threats (i.e. job losses, decreases in home-based manufacturing, etc.) to the U.S. economy.
A Solution to an Ongoing War…
Following the latest announcement that an additional ten percent of tariffs would begin on September 1, China allowed its national currency – the yuan – to slide to its lowest levels. Bitcoin and other forms of crypto could be the answer the country is seeking.
At press time, bitcoin has exploded to just shy of $11,800 – a near $1,000 gain from the last 24 hours, while traditional stocks are down everywhere thanks to the tariff announcement. This seems to be the running theme with American markets: when stocks fall, BTC and crypto spikes, and when crypto falls, stocks begin to surge higher.