Witnessing WallStreetBets, Beijing Aims To Restrict Bitcoin Trading In HongKong

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Last Updated on 23 March 2021 by CryptoTips.eu

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The Beijing government is coming out of the Covid-19 pandemic as a clear winner. Still, the apparatchiks are worried about what the future holds. One thing in particular, namely the popularity of VPN is a gaping black hole.

Via Virtual Private Networks, the younger generation (which is massive in China ever since it abolished the one-child policy) could hypothetically operate outside of the Communist Governments’s control.

Back in the day of Den Xiaoping, China’s demographic pyramid was like all other countries, but in recent years, there is a clear bulge in the middle. This is because of the abandonment of the one child policy a few years ago and the increase in salary for those living and working in the city. Only problem is that it has left China with a large young population, which from time to time question the Beijing government’s authority.

Advertentie.

Bitcoin versus Digital Yuan

For a control-freak like President Xi Jinping, an absolute nightmare. It has therefore loosened the reins somewhat and allowed in recent years the development of websites such as Weibo, RenRen and WeChat.

Another urgent issue is the upcoming interest of Chinese youngsters in digital currencies like Bitcoin, Ethereum and Dogecoin. Although the Beijing government is clearly using this interest to launch it’s own digital yuan this year, it at the same time presents a problem.

What if youngsters prefer Bitcoin over the Yuan?

Seeing the power of a group of retail investors like WallStreetBets that amassed only 7 million members on Reddit to take on the establishment of Wall Street, Beijing officials are worried that a larger group on Weibo or WeChat, armed with VPNs, could easily pump any digital coin they would want, and essentially make it more popular than their own Digital Yuan.

Curtailing retail investors

Although it is not officially admitted, this could be one of the reasons why the Chinese government is restricting trading in crypto in HongKong to anyone other than “professional investors” (aka people with more than 10 million HongKong dollars in assets). The move, which was announced last year already, did meet with great protest but still Beijing pushed it through.

The proposal for Hong Kong’s in fact goes a lot further than many other jurisdictions which have tried to rein in crypto.

Restricting cryptocurrency trading to professional investors only is different to what we have seen in other jurisdictions such as Singapore, the UK, and the US, where retail investors can buy and sell virtual assets

Commented Malcolm Wright, chair of Global Digital Finance’s Advisory Council in the South China Morning Post earlier this week.

If a recent study by Citibank is correct, the Chinese government would in this manner restrict crypto trading in HongKong to 7% of the population only.

Unless they now how to use a VPN of course.

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