Key Points
- Hong Kong University of Science and Technology (HKUST)’s Department of Mathematics VP for institutional advancement and Chair Professor Wang Yang criticizes China’s crypto mining ban
- Shift in business boosts American tax revenue as mining ban moves it across the Pacific to the US
- Hong Kong aims to become a virtual asset hub despite China’s crackdown
- Tokenization should be suggested by Wang for geopolitical risks handling
China’s clampdown on cryptocurrency mining has been one of the hottest topics in digital asset circles lately.
Speaking at a panel discussion in Hong Kong, the Vice President for Institutional Advancement at HKUST and Chair Professor in the Department of Mathematics, Professor Wang Yang shared his views on China’s strategy.
Hong Kong Professor: China’s Crypto Mining Ban Shifts Businesses to US https://t.co/BVEft3I9nY
— Bit Bear Legends (@bitbearlegends) July 3, 2024
Criticism of the Ban
Wang called it “very unwise” for Beijing to have prohibited cryptocurrency mining because he believes that this move was responsible for benefiting America through shifting businesses abroad.
Not only did it strengthen the USA’s position within global markets related to cryptocurrencies but also increased their tax revenues which could have stayed with China as a financial gain.
The professor argues that there were other ways that Chinese authorities could have taken to mitigate against risks associated with digital money such as Bitcoin.
Instead of banning all activities, governments might direct state-owned enterprises into investing heavily in domestic companies involved in the crypto-mining industry thereby allowing them to maintain control while participating actively and earning huge profits from this lucrative venture.
Hong Kong’s Crypto Ambitions
Despite mainland China imposing strict policies, Hong Kong is taking the opposite direction by positioning itself as one among many upcoming hubs for virtual assets; hence it has been licensing various exchanges dealing with cryptos plus starting exchange-traded funds (ETFs).
This shows how serious they are about becoming major players within these markets even though they face challenges like lack of regulatory clarity or infrastructure compared to other cities like Singapore or New York.
Wang noted that what sets apart Hong Kong from the rest is not just regulatory progressiveness but also its commitment to fostering innovation and trust within the crypto space which is necessary for success in any digital currency project.
This provides a safe haven where people can do their business without fear of running into difficulties with authorities as seen in mainland China.
The Future of Digital Assets in China
Professor Wang believes that China may still find some use for digital assets through tokenization going forward.
He thinks geopolitical risk management could be strategically achieved using tokens and economic stability enhanced through them too; therefore, he expects within three years global attitudes towards cryptocurrencies will have changed significantly enough to trigger breakthroughs within China’s financial markets sector.
Tokenization refers to an act of converting physical or tangible assets into virtual form represented by tokens on blockchain technology platforms characterized by greater liquidity and transparency levels compared to traditional systems.
For instance, if the Chinese government embraces this idea then it will be able to control its citizens’ digital finance activities while benefiting from blockchain’s technological capabilities as well as economic potentials offered globally through such an approach.
A Strategic Opportunity Missed
With hindsight being a 20/20 vision, it seems like banning crypto mining outright was not a strategic move on the part of Beijing especially considering how fast this sector has grown worldwide over the past few years alone.
Professor Wang’s insights suggest that there could have been more balanced approaches taken by China so that they do no miss out on harnessing positive impacts brought about by cryptocurrencies but rather gain ground against international rivals in terms of their usage domestically
Hong Kong’s forward-thinking view of virtual assets highlights the chance for a different and positive approach to crypto regulation.
With the development in the digital asset space, their policies might become a benchmark in terms of blending innovation with control so that gains are maximized while dangers kept under check.
