A Trump Presidency Could Trigger China To Embrace Crypto Within The Next 2 Years

HashKey Group chairman Xiao Feng predicts that China will see a shift in its stance towards crypto after the re-election of President Trump.

In a recent interveiw with South China Morning Post, Xiao suggested that a clear commitment from Washington to foster the cryptocurrency sector might accelerate Beijing’s timeline for embracing crypto-related businesses.

Trump's influence on China?

Despite China’s current ban on crypto trading, mining, and initial coin offerings, Xiao believes that geopolitical factors, such as U.S.-led sanctions on Russia for its invasion of Ukraine, could pressure China to shift its position sooner than expected.

“China perhaps needed five or six years from present to accept crypto without these events occurring.But now, because of these factors, that time frame could be shortern to two years.” Xiao explained.

During his campaign, Trump has pledged to make the U.S. the “crypto capital of the planet” and dismantle regulatory barriers seen as hostile to the industry.

Xiao views this as a catalyst for change regarding China's ingrained biases of how cryptocurrencies are seen as a threat to financial stability and often used in illicit activities.

Stablecoins could pave the way

China's strict stance when it comes to digital assets hasn't extinguished the country's interest in stablecoins.

In fact, Feng suggests that the first digital asset that China could potentially introduce could very well be regulated digital currencies pegged to real-world assets.

According to Feng

"Stablecoin offers the best solution for cross border business to consumer trade."

Stablecoin has been increasingly recognized for its potential to enhance cross-border payments by offering faster, more cost-effective, and transparent alternatives to traditional methods.

The world has also seen a boom in the usage of stable coins this year, especially in emerging and developing economies struggling with high inflation and economic uncertainty.

As of mid-2024, the cumulative market capitalization of stablecoins reached approximately $165 billion, facilitating trillions of dollars in transactions annually.

Notably, over 20 million blockchain addresses engaged in stablecoin transactions each month, highlighting their increasing role on everyday financial activities.

Another currency that the country has been working on is a state-controlled digital currency.

Recently, China launched a central bank digital currency (CBDC) payment card, which operates similarly to a traditional debit or credit card but includes dynamic QR codes for transactions and real-time balance updates.