Former UBS Asia investment banking head Joseph Chee stated on CNBC’s Squawk Box Asia that China could spark the next Bitcoin supercycle if Beijing eventually permits tightly managed cryptocurrency trading for its citizens. Chee, who currently leads the Nasdaq-listed Solana Company—which holds Solana (SOL) as its primary treasury asset—emphasized that while Chinese officials monitor digital asset technology closely through think tanks and academics, strict policy barriers remain intact.
- Joseph Chee, former head of Asia investment banking at UBS, claims Beijing opening crypto access could trigger another market supercycle.
- In February, the People's Bank of China (PBOC) and seven other agencies reaffirmed the nation's mainland crypto ban.
- China reported 670 rural bank closures in its latest yearly count as bad loans increase.
- Hong Kong licensed two bank-backed stablecoin issuers in April, with its first stablecoin launching in August.
Regulatory Hurdles and Capital Flight Concerns
Chee noted that officials in Beijing are using Hong Kong as a testing ground to observe how crypto trading can be deployed and monitored. However, he outlined two significant obstacles preventing a mainland opening: regulators need to develop a deeper understanding of the market, and Beijing remains intent on preventing capital flight through its strict capital controls. The ongoing economic environment, including China's crypto ban, reflects these regulatory priorities.
Mainland enforcement remains firm. In February, the PBOC and seven additional government agencies restated the full ban on crypto trading while requiring prior government approval for stablecoin operations. Chee mentioned that price volatility continues to be an ongoing concern for the PBOC, making near-term approval of onshore trading or dollar-pegged stablecoin issuance unlikely. Internal financial pressure also persists on the mainland, where 670 rural banks were shut down in the latest annual count due to non-performing loans.
Hong Kong Functions as the Regulatory Sandbox
Although Beijing has announced no plans to extend crypto access to the mainland, Hong Kong is advancing its own digital asset regulatory regime. Christopher Hui, Hong Kong’s Secretary for Financial Services and the Treasury, reiterated in June that the city intends to introduce a bill this year to license crypto dealers, custodians, advisers, and fund managers.
This legislative initiative follows Hong Kong licensing two bank-backed stablecoin issuers in April, which culminated in the launch of the city's first stablecoin in August.
Why It Matters
If Beijing were to allow regulated digital asset access to its population, the resulting influx of retail and institutional capital from the world's second-largest economy would likely reshape global market dynamics. However, Beijing’s intense focus on capital controls and banking sector stability suggests that crypto integration will stay confined to Hong Kong for the foreseeable future. Market participants looking for systemic policy shifts should monitor Hong Kong’s licensing developments rather than anticipating immediate regulatory changes on the mainland.
