Former UBS Asia investment banking head Joseph Chee suggests that China could initiate a new Bitcoin supercycle. This scenario depends on Beijing allowing its citizens to trade cryptocurrencies under strict regulatory oversight. Chee currently leads Solana Company, a firm listed on the Nasdaq that maintains Solana tokens as its primary treasury asset.
Mainland China maintains a ban on crypto trading, which was reaffirmed by the People's Bank of China and seven other agencies in February. Officials are currently using Hong Kong as a testing ground to evaluate how digital assets can be managed and controlled. Hong Kong plans to introduce a licensing bill for crypto dealers, custodians, and fund managers this year.
According to Chee, two primary obstacles prevent the reopening of the mainland market: the need for regulators to gain deeper expertise and concerns regarding capital flight. China enforces strict capital controls to limit money outflows. The country is also currently managing internal financial pressures, evidenced by the closure of 670 rural banks in the latest annual report.
Hong Kong has made progress in its regulatory framework by licensing two bank-backed stablecoin issuers in April and launching its first stablecoin in August. Despite these developments in the special administrative region, Beijing has not announced any plans to extend similar policies to the mainland. Chee noted that price volatility remains a persistent concern for the central bank.
