China’s Hainan Reserves Big Concessions for Crypto Industry
Chinese have established most of the major crypto exchanges and miner makers over the world, however, there is still no progress in China’s cryptocurrency compliance.
China’s authority still defines cryptocurrency like Bitcoin or Ethereum as a virtual commodity—people can hold it at their own peril. But for the trading platform, ICO, derivatives are completely negated.
China’s Hainan, an island province undertakes the responsibility of China’s establishment of “supervision sandbox”. The local government keeps a positive attitude to the industry as a major exchange including Huobi, OKEx has all settled in.
1. Hainan issued the policy “Support the construction of the public service system of computing power and the underlying platform of the public chain with independent intellectual property rights.
At present, many Chinese public chains have cut business, that is, research and technology development are carried out at home, and token is issued overseas. Hainan’s move aims to attract public chain teams. And the expression “building computing power system” is also quite interesting, as computing power is often related to crypto mining in the area of blockchain, it is unclear whether this policy covers the support for mining pools or mining systems. In fact, most of the emerging public chains include mining design. At present, the crypto mining industry is a relatively compliant category in China, many mining pools that have also presented themselves to the authority.
2. Hainan proposed to “support leading enterprises to explore the construction of digital asset trading platform and promote the first trial of digital asset-related businesses in Hainan”.
Meng Xiaosu, chairman of China Asset securitization forum, pointed out that blockchain and asset tokenization will become subversive technologies for real estate asset trading, and called for the establishment of Hainan REITs exchange in Hainan. In theory, all assets that can be used for asset securitization can be used for asset tokenization, that is, “STO”. In the past, the asset securitization to be promoted must by fiat money, in the future, it is possible to use digital token, including bitcoin.
China’s Chengdu and Chongqing have given similar formulation to set up a digital asset trading platform before. But how to do it is unclear. Of course, STO also has policy issues, which Beijing Financial Bureau and China’s central bank have refuted strictly.
Singapore, Hong Kong has adopted ‘sandbox’ mechanism to supervise the cryptocurrency industry. It is not known how open Hainan’s sandbox will be. Whether there be any room for exchanges and financial derivatives is unknown.
There is still a long path to go for the standardization of cryptocurrencies in China. However, with the number of users/funds in China, any small change may pry the global cryptocurrency industry to change dramatically.