Trump's Perspective on China's Crypto Involvement Amidst a Ban

During a recent interview with 60 Minutes on November 2, President Donald Trump expressed his views on China’s escalating role in the cryptocurrency space, stating, "China is getting into it very big right now." This statement highlights a complex and somewhat contradictory situation regarding China's involvement in digital assets.

At first glance, Trump's assertion appears paradoxical. Since 2021, Beijing has enacted a strict ban on cryptocurrency trading and mining, yet Trump positions China as a formidable competitor in the realm of digital currencies. This apparent inconsistency may stem from a conflation of various elements: the regulated market in Hong Kong, Beijing's ambitions for a central bank digital currency (CBDC), and the ongoing movement of stablecoins through gray markets.

The context of Trump’s remarks is crucial. Just a day after his interview, the Securities and Futures Commission (SFC) of Hong Kong made headlines at Hong Kong FinTech Week by announcing a relaxation of regulations. This new framework allows licensed virtual asset platforms in Hong Kong to access global order books and liquidity pools, thereby enhancing their capabilities.

Trump's Perspective on China's Crypto This regulatory shift further integrates Hong Kong into the international crypto landscape while the mainland continues to enforce its ban on digital currencies.

Whether intentional or not, Trump's comments reflect a real and intricate dynamic: the term "China" encompasses various actors and activities within the cryptocurrency domain, albeit not in the ways many might initially assume.

To understand this situation, we must recognize that the People's Bank of China declared all cryptocurrency transactions illegal on September 24, 2021. This ban targets not just peer-to-peer trading but also mining operations across the country.

The ban has effectively criminalized domestic exchanges, made it illegal to provide facilitative services, and blocked foreign platforms from serving users within mainland China. As of now, no significant media outlet or legal tracker has reported any reversal of these regulations.

While the ban succeeded in its immediate objectives—driving exchanges offshore, shuttering domestic mining operations, and limiting access to speculative tokens—it did not eliminate the fundamental reasons that people turn to cryptocurrency: the desire for capital mobility, the speed of cross-border settlements, and a growing distrust of traditional intermediaries.

As a result, these motivations have shifted to Hong Kong's regulated environment, moved into over-the-counter stablecoin transactions, or found new life in Beijing's own digital currency initiative.

In stark contrast to the mainland, Hong Kong's regulatory stance is more permissive. In June 2023, the SFC launched a licensing framework for virtual asset trading platforms, enabling retail investors to access approved tokens on compliant exchanges.

By April 2024, Hong Kong had also granted approval for spot Bitcoin and Ethereum ETFs—products that remain unavailable on the mainland—thereby offering institutional investors a regulated pathway into the crypto space.

The announcement made on November 3 further expands this progressive approach. Licensed platforms in Hong Kong can now connect with global liquidity sources instead of being limited to local order books.

This change addresses a significant disadvantage, as Hong Kong's domestic market alone cannot generate the depth or spreads needed to compete with major players like Binance or Coinbase.

By linking to international liquidity, licensed platforms in Hong Kong become attractive options for sophisticated traders seeking regulatory compliance without sacrificing execution quality.

This backdrop helps clarify the coherence behind Trump’s characterization of "China" in the crypto market, despite its technical inaccuracies. By using the term "China," he likely includes the Special Administrative Region of Hong Kong, which operates with a degree of policy autonomy distinct from the mainland.

The developments in Hong Kong—such as retail access, the introduction of ETFs, and the recent global liquidity connections—contribute to the perception that "China" is advancing in the cryptocurrency space, even as Beijing enforces its trading ban.

Trump's comments underscore a nuanced scenario in the cryptocurrency world where regulatory environments diverge significantly within the same geographical context. The interplay between mainland China's strict regulations and Hong Kong's more welcoming approach creates a complex landscape that continues to evolve, reflecting both opportunity and challenge in the global digital asset arena.