The great leap forward in crypto. The arm wrestling between the China and the United States is not new. But it has publicly reactivated on the occasion of the war in Ukraine led by the Russia. Diplomatic tensions surrounding US support for Taiwan, military maneuvers in the China Sea, trade disagreements, latent geopolitical rivalries in Africa and Asia, and Xi Jinping’s relationship with Vladimir Putin are all hot topics fueling tensions between these two giants. However, it could well be that Web 3 will also become the scene of an East-West confrontation, so much so that it will be the scene of an East-West confrontation, so much so that it will be the scene of an East-West confrontation. the Middle Kingdom seems to be interested in cryptodespite a rather measured official position. Let’s head for the People’s Republic of China to find out more about the role of Hong Kong in this game of Chess 3.0.
Hong Kong: China’s Trojan horse in cryptocurrency
When it comes to situation cryptos in Chinawe quickly understand the ruling party’s project. On the one hand, it decided to make life difficult decentralized projects, such as Bitcoinwhile at the same time promoting his own central bank digital currency project (MNBC). There is no place in the country for a currency that is not controlled by the authorities. Up to now, this might seem normal in a country run by a central power fortwhere individual freedoms are not at the heart of political concerns. But because things aren’t always as simple as they seem, it’s worth taking a little trip down memory lane. Hong Kong Special Administrative Region.
In the space of a few months, several surprising announcements have been made from this enclave, which fell back into Chinese hands in 1997. First, the Bank of China which issued tokenized financial securities on the network Ethereum in collaboration with the Union of Swiss Banks. A little later, we learn that local authorities are encouraging banks to offer financial services to crypto exchanges. Last but not least, HSBCHong Kong’s leading bank, began offering its customers the opportunity to invest in ETFs based on Bitcoin and Ethereum. The world upside down? Not really, but a sign of Chinese pragmatism when it comes to economics.
Sean Leea local crypto entrepreneur, simply describes Hong Kong’s role as follows:
« They [les autorités chinoises] always need a place where capital can flow in and out. »
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Tether’s dangerous links with the Middle Kingdom
A bit like Macao, Hong Kong serves as both an open-air laboratory and a small regulatory paradise to do business in peace. But this small territory also served as a rear base for setting up a form of soft power economic which would then radiate throughout the crypto ecosystem. By the way, when we think crypto, we also think stablecoin. And it’s rather surprising that the main one, Tether (USDT)denominated in US dollars, is based in… Hong Kong.
This little anomaly is rooted in the very origins of this token, whose story alone is worthy of a novel. a best-selling novel. Shady characters, millions of dollars, the drug cartel: all of this has fuelled – and still does – the wildest stories it’s complicated to sum up in a few words. Last but not least, a New York prosecutor also accused Tether and its parent company, iFinexto guarantee the solvency of its stablecoin thanks to financial securities issued by Chinese companies.
In the end, it is clear that the Special Administrative Region of Hong Kong allows the China to set foot in the cryptowhile claiming the opposite. At a time when the United States is trying to decide what attitude to adopt towards this new sector of activity, and when Singapore, Dubai or even London more recently, have already positioned themselves as global hubs, Beijing is playing a double game that serves its interests. Adopting the monetary technology of blockchain to accentuate control over its own population (social credit, MNBC, etc.) and making the most of the financial possibilities of crypto using the peculiarities of Hong Kong.
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