China’s Crypto Ban Backfires: Billions in Tax Revenue Flow to USA, Warns a Hong Kong University President
Wang Yang explained that China’s blanket ban on crypto was unwise because billions in tax revenue shifted from China to the USA.
In 2021, China imposed a blanket ban on cryptocurrency mining and transactions, citing financial and environmental concerns. This decision led to a mass exodus of crypto miners to other countries, particularly the United States, which subsequently gained billions in tax revenue.
Critics, including Wang Yang, vice president of the Hong Kong University of Science and Technology, argue that the ban was unwise and economically detrimental to China.
Wang noted that the crypto blanket ban decision caused miners to relocate to the U.S., resulting in over $4 billion in tax revenue for the U.S.
According to Wang, the Chinese government should reconsider its stance on cryptocurrency, especially with the potential re-election of Trump.
Furthermore, Wang suggested that China might need to reconsider its stance on digital assets and their role in the “Belt and Road” initiative, as current policies have led to uncontrollable situations regarding cryptocurrencies.
He mentioned that China may need a swift policy re-evaluation. He also reflected on his past scepticism of Bitcoin and blockchain, which led to missed opportunities, and criticised Hong Kong’s slow pace in embracing blockchain technology. Wang emphasised that Hong Kong should aim higher and lead regional development in blockchain and digital assets.
Hong Kong & crypto adoption
Retail crypto trading in the jurisdiction of Hong Kong, a special administrative region of China, was restricted following China’s crypto blanket ban.
In 2023, Hong Kong government agencies introduced a systematic crypto regulatory framework to allow crypto trading for everyone and provide regulatory guidance for crypto businesses. For this crypto regulation decision, Hong Kong authorities secured significant support from the Chinese authorities.
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