China’s crypto stance unchanged by moves in Hong Kong, executive says
Despite Hong Kong steadily moving forward with cryptocurrency adoption, mainland China has not changed its anti-crypto stance when it comes to local regulations.
Some Chinese state-linked banks have increasingly opened bank accounts to serve crypto customers in Hong Kong. CPIC Investment Management – a Chinese state-backed firm regulated as an entity in Hong Kong – 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 (BTC) anytime soon, according to CPIC Investment Management CEO Chenggang Zhou.
“The Hong Kong government is trying very hard to promote Web3 and crypto, but it does not involve any changes in mainland regulations or the Chinese government’s stance on crypto,” Zhou said in an interview with Cointelegraph on May 5.
Zhou stressed that despite China’s government support, CPIC Investment Management operates as a Hong Kong entity regulated by the Securities and Futures Commission.
“Hong Kong’s regulations allow us to invest in different markets or asset classes or products such as cryptocurrencies, so we are not violating any regulations or laws,” the CEO said. He added:
“We got involved in crypto because Hong Kong regulations allow us to do so. But that is in no way indicative of the Chinese government’s stance or policy, or change of policy.”
China has maintained its anti-crypto stance for a long time, even before banning crypto entirely in September 2021, Zhou noted. He said he doesn’t expect local governments to change crypto policy in the foreseeable future.
The CEO is not alone in believing that China remains and will remain anti-crypto as he tries to increase Chinese bank deposits with crypto accounts.
“Given the Chinese government’s crackdown on the financial sector, it’s hard to imagine China loosening its grip on 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 deposits, whether fiat to buy crypto or crypto itself. “They divide the markets to shut out domestic Chinese customers but attract foreign customers,” he noted.
The lawyer also noted that the crypto market in mainland China “remains effectively shut down.” That raises concerns about enforcement of Chinese clients who get a chance to use Hong Kong exchanges to get money out of China. “Obviously, the authorities will try to stop this leak,” Lesperance said.
CPIC’s Zhou also mentioned that crypto exchanges in Hong Kong have strict Know Your Customer policies, which aim to limit mainland Chinese investors on their platforms.
“I do not expect any licensed crypto exchanges in Hong Kong to accept mainlanders onshore to trade on the exchanges,” Zhou said.
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