Hong Kong Professor Challenges China’s Crypto Ban, Advocates for Digital Asset Embrace

 July 4, 2024

By Sharan Kaur Phillora

A Hong Kong professor has sparked debate by criticizing China’s cryptocurrency mining ban and advocating for a more open approach to digital assets. Wang Yang, vice president for institutional advancement and chair professor at the Hong Kong University of Science and Technology (HKUST), called the ban “very unwise” during a recent panel discussion.

Here’s what we know:

Wang argued that the ban has driven crypto-related businesses to the United States, contributing to US tax revenue instead of benefiting China. He suggested an alternative approach where state-owned enterprises could have taken stakes in domestic crypto mining firms, allowing the government to control risks such as capital outflows and money laundering.

This critique comes amid growing interest in Hong Kong’s efforts to develop a virtual asset sector, despite mainland China’s continued crackdown on the cryptocurrency industry. Hong Kong has been making moves to license crypto exchanges and launch exchange-traded funds that invest directly in cryptocurrency tokens.

Wang also highlighted potential geopolitical risks, suggesting that tokenization could be a solution if China faces restrictions from international financial systems. He predicted a possible “breakthrough” within three years, as people reconsider the nature and potential benefits of digital assets.

The professor’s comments add to a growing chorus of voices questioning China’s hostile stance towards cryptocurrencies. Previously, Chinese economist Huang Yiping, a former advisor to the central bank, had raised concerns about the long-term sustainability of China’s rigid cryptocurrency ban.

As Hong Kong continues to position itself as a potential gateway for crypto firms to access the mainland Chinese market, the contrast between the special administrative region’s approach and that of mainland China becomes increasingly apparent. This situation has led some industry experts to speculate that China’s eventual opening up to cryptocurrencies may be inevitable, though the timeline remains uncertain.

About the author

Sharan Kaur Phillora’s thirst for knowledge has led her to study many different subjects, including NFTs and Blockchain technology – two emerging technologies that will change how we interact with each other in the future. When she isn’t exploring a new idea or concept, she enjoys reading literary masterpieces.