Officials from the Shanghai branch of China’s State-owned Assets Supervision and Administration Commission (SASAC) met with local government representatives on Thursday, July 10, to talk about digital currency policy and the potential role of stablecoins.
Roughly 60 to 70 people attended the meeting, which could signal a possible softening in China’s strict position on crypto. Since 2021, digital asset trading and mining have been banned across the country. During the discussion, the commission’s director emphasized the importance of staying alert to rapidly evolving technologies and encouraged deeper exploration into digital currencies.
The meeting follows recent pushes by major Chinese tech firms such as Ant Group and JD.com, which have reportedly asked China’s central bank to consider allowing stablecoins backed by the yuan. At the same time, Hong Kong is preparing to launch its own regulatory framework for stablecoins on August 1.
The two firms are among over 40 companies that are expected to seek stablecoin licensing in Hong Kong. However, reports from Yicai, a local media outlet, suggest that only a few companies are expected to gain approval under the new rules.
Although the Shanghai meeting shows signs of discussion at the state level, it’s still uncertain whether any regulatory changes will follow. China continues to enforce tight control over capital flows, and despite the global momentum of digital currencies, domestic policies remain highly restrictive.
Before the 2021 ban, China was a powerhouse in the Bitcoin mining world, responsible for nearly 50% of the global mining capacity. The crackdown caused an immediate drop in mining activity, forcing many miners to shut down and move their operations elsewhere.
However, by early 2022, Bitcoin’s computing power had already recovered. Despite the initial disruption, the network bounced back and has only grown stronger since. The global mining capacity is now nearly five times what it was before China’s crackdown. A study from Cambridge published this year found that 75% of Bitcoin mining now takes place in the United States.
Although China has distanced itself from the crypto space, the global ecosystem hasn’t slowed down. Bitcoin recently surged past $118,000, setting a new record and gaining over 6% in just one day. The rally has lifted the entire market, with Ethereum (ETH) and XRP posting even higher returns. According to data from CoinGlass, this has caused over $1.1 billion in short positions to be liquidated across crypto derivatives.
The meeting in Shanghai provides additional credence to the conviction of firms like Riot Platforms Inc. (NASDAQ: RIOT) regarding the staying power of blockchain technologies like crypto assets around the world.
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