China To Unban Crypto? Rumors of a Policy Shift Ignite Market Hopes
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Crypto investors are impatient as Bitcoin trades sideways during the summer slump. However, some signs suggest a major shift is upcoming. Analysts expect Bitcoin to perform well in the fourth quarter, and rumors of China reconsidering its crypto ban have shaken the sector.
After Eupore, China is tightening its anti-money laundering (AML) laws with new regulations targeting cryptocurrency transactions. Starting Tuesday, virtual asset transactions, including those through crypto exchanges, will be classified as money laundering activities.
What’s New in China?
This update comes from the Supreme People’s Court and the Supreme People’s Procuratorate, marking the first time such a move has been made in China. The law now defines laundering amounts over 5 million yuan (about $685,000) or causing losses exceeding 2.5 million yuan (about $343,000) as serious offenses. Convictions can lead to imprisonment and significant fines, with penalties increasing for more severe sentences.
Survey of Chinese Crypto Users
In the meanwhile, in a recent survey, 96.72% of Chinese-speaking crypto investors chose Binance. Gate.io and OKX are popular. 87.17 percent of the community gets bitcoin news via social media X. Despite China’s regulatory framework, many users speculate and hold crypto full-time. China’s changing crypto stance could be due to the upcoming US elections.
China’s to Ban Crypto?
One of the biggest rumors creating buzz is that China might lift its ban on cryptocurrency trading. The potential legalization of cryptocurrencies in China might lead to increased adoption and innovation in the sector. In July, Yifan He, CEO of Red Date Technology, and Mikko Ohtamaa, co-founder of Trading Strategy, expressed doubts about China ever allowing its citizens to freely trade Bitcoin with local currency, citing the government’s political agenda. China previously banned crypto exchanges in 2017 and intensified its crackdown on crypto in 2021.
However, this policy shift, coupled with recent moves by other countries like Russia to leverage crypto activities, could signal a broader trend towards more positive global regulations for digital currencies. China’s re-entry into the crypto market could drive significant price movements and volatility, offering new opportunities for investors and tech companies.
Justin Sun’s Call for Policy Reassessment
Adding to the debate, Tron founder Justin Sun has urged China to reconsider its stance on Bitcoin, particularly in light of former U.S. President Donald Trump’s recent endorsement of the digital currency. Trump’s plan to create a “strategic Bitcoin stockpile” aims to position the U.S. as a global leader in crypto, which could prompt China to reassess its fluctuating crypto policies. Sun argues that competition between China and the U.S. on Bitcoin policy could ultimately benefit the cryptocurrency industry.
Earlier this year, China allowed certain crypto activities in Hong Kong, including launching ETFs and retail trading. If these permissions extend to mainland China, the extra capital flowing into the market could further fuel optimism for the rest of 2024.