On September 28, the Tsinghua Wudaokou Chief Economist Forum took place in Beijing, featuring a speech by former Vice Minister of Finance Zhu Guangyao. He emphasised the importance of studying cryptocurrency's development, acknowledging its negative effects and risks to capital markets while urging an examination of international policy shifts, given their critical role in the digital economy.
Zhu Guangyao said China needs to strengthen artificial intelligence infrastructure
Zhu noted that the current digital economy is steering global trends and is marked by significant advancements, particularly in artificial intelligence, heralding what he termed the fourth industrial revolution. He pointed out that China and the U.S. are at the forefront of this development, although he recognised that gaps still exist, particularly in foundational technologies.
He discussed the importance of infrastructure, highlighting data centres and submarine cables as vital components for global data exchange. He expressed concerns about the U.S. Clean Network Initiative, which aims to restrict Chinese collaboration in this area, indicating that such decoupling could lead to substantial economic losses for both countries.
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Zhu Guangyao acknowledges the uniqueness and risks of cryptocurrency
Zhu identified cryptocurrency as a unique asset within the digital economy, warning of its destructive potential on international anti-money laundering efforts and its capacity to destabilise financial markets. He pointed to a significant shift in U.S. policy, noting that both Republican and Democratic parties are now more open to cryptocurrency, exemplified by the SEC's approval of Bitcoin ETFs.
Despite the acknowledged risks of cryptocurrencies, Zhu argued for the necessity of adapting to international policy changes, especially in light of developments in emerging markets and BRICS nations.
In response to a query about China's position in digital currency technology since 2015, Zhu acknowledged the country's challenges but stressed the need for regulatory improvements to harness cryptocurrency's potential without succumbing to its risks.
“China needs to step up action”
As per the former government official, the upcoming U.S. presidential election may also introduce additional policy changes following the approval of spot Bitcoin exchange-traded funds.
He even quoted former President Donald Trump, who has been advocating for embracing crypto to prevent China from taking the lead in the sector.
The call for a policy shift echoes comments from Tron founder Justin Sun, who urged China to reconsider its stance on crypto following Trump’s endorsement of Bitcoin.
Sun had tweeted in July, “China also needs to step up… US policies have warmed. China should make further progress.”
China still dominates crypto mining
Despite the country’s blanket ban on BTC mining and trading, which went into effect in 2021, interestingly, China controls over 55% of the BTC mining network via mining pools.
In a Sept. 23 X post, Ki Young Ju, highlighted that this BTC mining dominance is slowly shifting away to US mining firms. Ju revealed that US pools manage around 40% of all BTC mining operations, primarily catering to institutional miners in America while Chinese pools support relatively smaller miners in Asia.
#Bitcoin hashrate dominance is shifting to U.S. mining companies.
Chinese mining pools operate 55% of the network, while U.S. pools manage 40%.
#Bitcoin hashrate dominance is shifting to U.S. mining companies.
Chinese mining pools operate 55% of the network, while U.S. pools manage 40%.
U.S. pools primarily cater to institutional miners in America, while Chinese pools support relatively smaller miners in Asia. pic.twitter.com/kepopLWBSD
— Ki Young Ju (@ki_young_ju) September 23, 2024
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Related reading：Senator Elizabeth Warren warns countries, led by China, are spying on the U.S. through cryptocurrency mining
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