Despite Hong Kong making progress in adopting cryptocurrencies, mainland China has not altered its anti-crypto stance with regards to local regulations.
Some Chinese banks affiliated with the state have started opening bank accounts to cater to their crypto clients in Hong Kong. In April, CPIC Investment Management, a China government-supported entity regulated as a Hong Kong entity, even launched two cryptocurrency funds.
However, CPIC Investment Management CEO Chenggang Zhou has stated that these developments do not imply any changes in mainland regulatory regulations or the Chinese government’s attitude toward crypto. According to him, China has maintained its anti-crypto stance even before banning crypto completely in September 2021.
Zhou emphasized that CPIC Investment Management works as a Hong Kong entity regulated by the Securities and Futures Commission, and Hong Kong regulations allow the company to invest in different markets, asset classes or products like cryptocurrencies without breaching any regulations or laws.
“We got involved in crypto because Hong Kong regulations allow us to do that. But it’s in no way any indication of the China government’s attitude or policy, or change of policy,”
China aims to increase its foreign currency deposits whether it is fiat to purchase crypto or crypto itself, but it doesn’t seem like the country is loosening its grip over its nationals’ ability to use crypto anytime soon. In the meantime, Lesperance & Associates founder David Lesperance points out that the crypto market in mainland China is still effectively shut down, so it raises enforcement concerns about Chinese clients using Hong Kong exchanges to get money out of China.
Furthermore, Zhou thinks it’s unlikely that any licensed crypto exchanges in Hong Kong will accept onshore mainland citizens to trade on their platforms. Such exchanges in the area have strict Know Your Customer policies that are designed to restrict mainland Chinese investors from accessing their platforms.