While Hong Kong has been making steady progress with cryptocurrency acceptance, China has not changed its anti-crypto stance based on local regulations.
Some Chinese state-affiliated banks have increasingly opened bank accounts to serve crypto clients in Hong Kong. CPIC Investment Management — a firm regulated as a Hong Kong entity backed by the Chinese government — even launched two cryptocurrency funds in April.
All these developments do not mean that China has softened or will soften its approach to regulating Bitcoin.
Anytime, according to CPIC Investment Management CEO Chenggang Zhou.
“The Hong Kong government is trying very hard to promote Web3 and crypto, but that does not indicate any changes in mainland regulatory regulations or the Chinese government’s attitude toward crypto,” Zhou said in a May 5 interview with Cointelegraph.
Zhou emphasized that CPIC Investment Management operates as a Hong Kong entity regulated by the Securities and Futures Commission, despite its support from the Chinese government.
“Hong Kong regulations allow us to invest in various markets, asset classes or products such as cryptocurrencies, so we are not violating any regulations or laws,” the CEO said. He added:
“We got into crypto because Hong Kong regulations allow us to do that. But this is in no way indicative of a change in attitude, policy or policy by the Chinese government. ”
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China has long maintained an anti-crypto stance, even before outright banning crypto in September 2021, Zhou noted. He said he does not expect the local government to change its crypto policies in the future.
The CEO is also not alone in thinking that China will remain anti-crypto as Chinese banks try to increase deposits with crypto accounts.
“With the Chinese government coming down hard on the financial sector, it is hard to imagine China loosening control over the ability of Chinese citizens to use crypto,” Lesperance & Associates founder David Lesperance told Cointelegraph.
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According to Lesperance, China wants to increase its foreign currency investment, be it crypto or fiat to buy crypto. “They segment markets to close domestic Chinese customers but attract foreign customers,” he noted.
The lawyer also noted that China’s crypto market is “still effectively closed.” Enforcement has raised concerns about the opportunity for Chinese clients to use Hong Kong exchanges to take money out of China. “Of course, the authorities will try to stop this leak,” Lesperance noted.
CPIC’s Zhou mentioned that Hong Kong’s crypto exchanges have know-your-customer policies and aim to limit Chinese investors to their platforms.
“I don’t expect any of the licensed crypto exchanges in Hong Kong to accept offshore nationals to trade on the exchanges,” Zhou said.