In a rare move, a Shanghai regulator just held a meeting on stablecoins and digital currencies. Is China warming up to crypto?
Shanghai Regulator Discussed Crypto In A Meeting
Shanghai State-owned Assets Supervision and Administration Commission (SASAC) held a meeting on Thursday with local government officials to discuss stablecoin and digital currency policy, as reported by Reuters.
The meeting, which involved around 60-70 attendees, could hint at a change in China’s stance, as crypto has been banned in the country since 2021. According to the report, the regulator’s director told the meeting about the need to have “greater sensitivity to emerging technologies and enhanced research into digital currencies.”
SASAC has called this discussion after tech giants like JD.com and Ant Group reportedly urged China’s central bank to authorize yuan-based stablecoins, and amid Hong Kong planning to roll out its stablecoin legislation starting August 1st.
JD.com and Ant Group are among the 40+ companies preparing to apply for stablecoin licenses in Hong Kong. According to local media outlet Yicai, however, only a few of the aspirants are likely to find approval.
While Shanghai has held this meeting, it’s unclear whether it will lead to something tangible, considering hurdles remain in the form of China’s strict capital controls. As mentioned earlier, crypto received a ban in the nation in 2021. Both trading and mining activities were put to a stop, citing concerns about the stability of the financial system.
Prior to the ban, the country hosted half the global Bitcoin mining computing power, or “Hashrate.” News of the crackdown led to a sharp drop in the Hashrate, as miners shut down their operations and prepared to relocate.
By the start of 2022, however, the BTC computing power had already bounced back, suggesting that while the ban initially dealt a serious blow, the network quickly made a full recovery. Growth in the mining industry has continued since then, and today the global Hashrate stands at a level roughly five times the pre-ban figure.
According to a report published by Cambridge earlier in the year, the US now accounts for 75% of all reported Bitcoin mining activity.
The distribution of the reported global BTC mining activity | Source: Cambridge Digital Mining Industry Report
While China may have locked itself out of crypto, the sector has still continued to thrive globally. With Bitcoin setting yet another record after crossing $118,000, perhaps the worldwide momentum may now be becoming too big for the nation to ignore.
Bitcoin Has Entered All-Time High Exploration Mode
Bitcoin saw a breakout to a new all-time high Wednesday, but the digital asset has taken it up a gear over the past day as its price has shot up over 6%.
Looks like the price of the coin has witnessed a rapid increase | Source: BTCUSDT on TradingView
The run has ignited crypto-wide momentum, with the likes of Ethereum (ETH) and XRP (XRP) even printing larger profits than Bitcoin. This has resulted in short liquidations of more than $1.1 billion in the derivatives market, as per CoinGlass.
The data for the liquidations related to the crypto sector in the last 24 hours | Source: CoinGlass
