Asian nations, particularly China, are welcoming America’s strict measures against the crypto industry as an opportunity to establish dominance in digital finance. Despite China’s general opposition to cryptocurrencies, it now has various avenues to emerge as a key player in the field, while other major Asian economies are also adopting their own approaches to embrace crypto, in contrast to the tightening regulations in the West.
According to a recent report by Politico, China possesses various strategies to emerge victorious in the competition for dominating the future of money and finance. Despite banning cryptocurrencies for retail purposes, China is actively developing its own blockchain networks and central bank digital currencies, leveraging its special administrative region of Hong Kong. This approach grants the Chinese government unprecedented control over digital finance domestically and potentially internationally, especially as more nations opt to trade with China using the yuan instead of the dollar.
Moreover, Beijing has established a presence in the global digital asset markets through Hong Kong, creating a niche that competes with other free-market financial hubs. As noted in the report, the world’s largest stablecoin issuer, Tether, is owned by a Hong Kong-based company.
In Hong Kong, regulators are exerting pressure on major banks to offer banking services to crypto exchanges, which contrasts sharply with the approach of banks in the US and UK, where they are willing to cut off services for customers involved with crypto exchanges. The largest bank in the region, HSBC, has responded to this demand by providing its clients with access to Bitcoin and Ethereum ETFs. Additionally, the Hong Kong rating agency HKVAC has introduced a virtual asset index that encompasses a diverse selection of tradable crypto assets.
To summarize, while US and UK banks are prone to severing ties with customers engaged in crypto exchanges, Hong Kong regulators are compelling large banks to offer such services. HSBC, the biggest bank in the region, has responded by allowing its clients to access Bitcoin and Ethereum ETFs. Furthermore, the Hong Kong rating agency HKVAC has introduced a virtual asset index comprising a wide range of crypto assets that can be traded.