Hong Kong needs China’s approval to adopt cryptocurrencies, according to Animoca executive.

Hong Kong needs China's approval to adopt cryptocurrencies, according to Animoca executive.

The Blockchain Industry: Hong Kong’s Adoption and China’s Web3 Push

The rapid adoption of cryptocurrencies and Web3 in Hong Kong is not only a reflection of the city-state’s interest but also indicative of broader moves happening in mainland China. Despite China’s ban on cryptocurrencies, the release of China’s Web3 white paper in May, which emphasized the future of the internet, suggests that the country is actively exploring this technology. It is important to note that this development coincided with Hong Kong’s announcement to allow retail crypto investments.

The significance of China’s Web3 white paper lies in its message, which goes beyond what is happening in Hong Kong. As Animoca co-founder Yat Siu mentioned at the Ethereum Community Conference (EthCC), this message comes from a higher authority. Siu emphasized that Hong Kong would not take such actions without China’s approval. This demonstrates that the adoption of cryptocurrencies and Web3 in Hong Kong is part of a larger strategy driven by mainland China.

The motivation behind China’s push for Web3 is not explicitly mentioned in the white paper, but Siu suggests that it is a means to challenge the dominance of United States’ tech giants. Siu points out the potential security risks associated with countries’ reliance on companies like Google, Apple, and Facebook. By embracing Web3, countries like Japan, Korea, and China see an opportunity to break away from the dominance of U.S.-based technologies.

For China, in particular, challenging U.S. hegemony is crucial for its de-dollarization efforts. Siu highlights that Web3 can help reduce dependency on the U.S. dollar, which is the global currency. This aligns with the country’s broader agenda of seeking alternatives to the dollar.

Despite China’s ban on crypto activity, it has remained one of the largest crypto mining hubs globally. The recent crypto-friendly regulations in Hong Kong have sparked hope among observers that China could potentially lift its ban on cryptocurrencies. However, executives from state-related institutions, such as CPIC Investment Management, have reiterated that China will remain anti-crypto in the near future.

In summary, Hong Kong’s adoption of cryptocurrencies and Web3 is not limited to the city itself but reflects broader developments in mainland China. The release of China’s Web3 white paper and its emphasis on the future of the internet indicate a strategic move by the country. By embracing Web3, China aims to challenge the dominance of U.S.-based technologies and reduce dependency on the U.S. dollar. While there is hope for a potential lift of China’s ban on cryptocurrencies, it is important to consider that the country’s stance remains anti-crypto for the time being.