March 03 2025
By Anjali Kochhar
Mainland China may soon allow access to Bitcoin for its traders through an indirect route via Hong Kong’s regulated crypto markets, despite its longstanding ban on direct cryptocurrency trading. While Beijing remains cautious about letting crypto exchanges operate within its borders, a potential workaround is emerging. Instead of offering direct access, Chinese investors could trade Hong Kong-based crypto ETFs using mechanisms similar to those already in place for international stock investments.
China currently permits investors to purchase U.S. stocks through its Qualified Domestic Institutional Investor (QDII) program. Additionally, systems such as the Shanghai-Hong Kong Connect and Shenzhen-Hong Kong Connect enable mainland investors to trade Hong Kong stocks, with all transactions settled in RMB. Yifan He, CEO of Red Date Technology, argues that this framework could be adapted for crypto. “The key is capital control,” he explained at Consensus Hong Kong. Under such a model, funds remain within China, eliminating risks of currency fluctuations and capital flight.
In practice, Chinese investors would not hold cryptocurrencies directly. Instead, their investments in crypto assets would be managed by intermediaries like licensed securities firms, mirroring the existing system for U.S. ETFs. This setup would provide exposure to digital assets without transferring the underlying assets across borders, thereby maintaining strict regulatory control. For China, a country with over 200 million retail investors and an economy seeking new stimulus this method could represent a balanced compromise between innovation and control.
China’s nuanced stance is further illustrated by its embrace of blockchain technology while strictly regulating crypto trading. Recent signals from financial regulators indicate growing interest in Bitcoin, with He estimating more than a 50% chance of broader acceptance within three years. However, market odds on Polymarket suggest that full unbanning remains a remote possibility. Thus, Beijing may soon navigate crypto regulation.
About the author
Anjali Kochhar covers cryptocurrency and blockchain stories in India as well as globally. Having been in the field of media and journalism for over three years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.
