China is now directly competing with the United States of America regarding the crypto industry after launching a new crypto whitepaper. According to many reports, one of the objectives of China is to make its capital, Beijing, become an innovation hub for the digital economy, such as the crypto industry.
Their milestones are quite obvious as they entered the top 10 of Chainalysis’ Global Crypto Adoption Index report for 2022. However, many of these achievements seem to be under the radar, as many crypto enthusiasts are unaware of them.
A new trend has also emerged when the crypto market in China and the US are compared. According to reports from the digital assets market data provider, Kaiko, a new divergence was recorded between Bitcoin’s [BTC] correlation with U.S. equity markets (S&P 500) and that of Chinese equities (CSI 300). Apparently, the Chinese correlation with Bitcoin has increased significantly since it started.
The BTC correlation with the US dollar has considerably depreciated compared to the US. What caused this change between the two countries can be seen in the new China blockchain regulation and the US crypto policies. In the last months of 2023, the financial sector in the United States took massive hits after the collapse of vital institutions. Banks like the Silicon Valley Bank collapsed, leading to enormous distrust of the traditional financial ecosystem. This further decoupled BTC from traditional finance in the country.
With the US crypto policies not favoring the crypto community, the new China blockchain regulations seem to be catching the crypto community's attention. Many crypto enthusiasts perceive that China might bear the opportunity which the United States has been withholding for a long time.
Will China Become the New Crypto Hub?
Experts speculate that signs from China indicate that the country might be moving to take over as the new crypto hub worldwide. The recent signals, including China reopening its market to the digital assets industry, are sending strong indicators of crypto adoption in the Asian region, as many consistently monitor the situation.
The Beijing Municipal Science and Technology Commission recently published a whitepaper in a web forum. This whitepaper was published at the Zhongguancun Forum on 27 May. Reports show that this is part of the effort to establish the Chinese capital as a major global innovation hub for the crypto industry and the entire digital economy.
The government also plans to set up a whopping $14 million to develop this plan. However, China is not making its plan to be obvious. This is where there's a catch. Recent developments point that the government may try to use its metaverse acceptance to play down some of the bans they placed on digital currencies. China had originally placed a complete ban on cryptocurrency trading and mining in September 2021, but it seems they are using the metaverse to ease the ban.
Interesting timing on this Web 3.0 white paper from the Beijing government tech committee with the June 1st anticipation in Hong Kong. pic.twitter.com/0Ts1UB0jnL— CZ 🔶 Binance (@cz_binance) May 27, 2023
Many crypto personalities have already reacted to the new development coming from China. According to Binance CEO Changpeng Zhao, the latest move by China is "interesting." "Interesting timing on this Web 3.0 white paper from the Beijing government tech committee with the June 1st anticipation in Hong Kong," the crypto billionaire commented on Twitter.