Solana Company CEO Joseph Chee stated that if China reopens its crypto market, it could trigger a new round of market "super cycles."
It is reported that wallets associated with the Chinese government hold approximately 190,000 bitcoins, valued at around $15.7 billion.
A Chinese policy comprising 19 measures aims to promote the expansion of blockchain infrastructure in fields such as manufacturing, banking, and data sharing.
If China finds a way to reopen access to digital assets, it could become an important driving force for the next round of the crypto market cycle. Solana Company CEO Joseph Chee stated that Beijing is using Hong Kong to test crypto regulatory rules.
At the same time, it is reported that China's holdings of Bitcoin and its mining activities also indicate that any policy shift could have an impact on the global market.
China uses Hong Kong to test encryption regulations
In the most recent interview, Solana Company CEO Joseph Chee stated that despite China's restrictions on cryptocurrency trading, it cannot ignore blockchain technology.
He said, "They are using Hong Kong as a region to test how this technology will be implemented and will find ways to manage it."
Beijing continues to use Hong Kong as a testing ground for the development of Web3. Hong Kong is approving regulated spot ETF, tightening audit rules for virtual asset service providers (VASP), and advancing stablecoin projects, such as HSBC's RedCoin.
This approach may help the Chinese mainland observe how the crypto market operates under stricter regulations, before deciding whether to expand access.
Chee believes that if China allows for more encrypted transactions and blockchain applications, the impact could be quite significant.
He said, "I believe the crypto market is about to experience another supercycle."
Why China's return could be significant for the crypto market
Chee mentioned that Asia has a large population and played an important role in the early stages of adoption of cryptography. He stated that China's restrictive measures have slowed down this growth, while the US market has gained greater influence.
Although China banned cryptocurrency trading in 2021, it is estimated that government-affiliated wallets in China still hold 190,000 bitcoins, worth approximately $15.7 billion. Although the Chinese government has not officially purchased bitcoins as part of its strategic reserves, it remains one of the largest government entities in the world holding bitcoins.
China still maintains connections with Bitcoin mining. It is estimated that miners associated with China control approximately 14% to 20% of the world's Bitcoin computing power.
Therefore, once it reopens, Chinese traders and enterprises may return to the market.
Reports say that Chee believes that China will eventually find a way to manage cryptocurrencies.
China is building blockchain infrastructure in addition to encryption.
In addition to token trading, China is also promoting other applications of blockchain technology. According to reports from Xinhua News Agency, a policy comprising 19 measures aims to build a national blockchain and computing power infrastructure.
The focus of this plan is to introduce blockchain into manufacturing, banking, and data sharing, while also improving data ownership rules and mechanisms for cross-border data flow.
This indicates that despite the restrictions on access to cryptocurrencies, Beijing continues to explore blockchain applications.
Author: Rizwan Ansari; Source: Coinpedia.
