- China has unveiled a white paper in a bid to establish its capital Beijing as a global innovation hub for the digital economy.
- China has again been included in the top 10 of Chainalysis’ Global Crypto Adoption Index report for 2022.
A fascinating trend emerged in the cryptocurrency industry, which caught the attention of several analysts and major players. According to the digital asset market data provider Kaikothere was a noticeable divergence between that of Bitcoin [BTC] correlation with US equity markets (S&P 500) and that of Chinese equities (CSI 300).
The correlation between BTC and Chinese stocks (CSI 300) strengthened significantly in 2023. This was in stark contrast to the King Coin’s declining correlation to US equities. The US banking crisis in March led investors to put their money in the crypto market. This ultimately played a major role in decoupling BTC from traditional finance.
While the regulatory landscape in the US has become difficult for crypto market participants, a new glimmer of hope has emerged from China.
Source: Kaiko
Crypto 2.0 in China?
The aforementioned development can be attributed to recent indications that China is reopening its market to the digital asset industry.
The Beijing Municipal Science and Technology Commission published a white paper at the Zhongguancun Forum on May 27, in a bid to turn the Chinese capital into a major global innovation hub for the digital economy. In addition, the committee plans to set aside $14 million to achieve this goal.
The latest attempt to advance its Web3 industry is a marked departure from its previous crackdown. Recall that in September 2021, China imposed a complete ban on cryptocurrency trading and mining.
China was one of the first countries to embrace crypto assets, ushering in an era of growing awareness and trade from 2009 to 2018. At one time, China was the BTC trading and mining capital of the world. However, after the general ban, it ceded its position to the US
But things could take a turn in China’s favor given its latest move. In addition, crypto czars have given a thumbs up to the white paper. Additionally, CZ, CEO of Binance, called the timing of the release “interesting” as Hong Kong’s new crypto regulations come into effect from June 1.
Tron founder Justin Sun retweeted CZ’s tweet, calling the government’s focus on Web3 “fascinating”.
Interesting timing on this Web 3.0 white paper from the Beijing government technical committee with the anticipation of June 1 in Hong Kong. pic.twitter.com/0Ts1UB0jnL
— CZ 🔶 Binance (@cz_binance) May 27, 2023
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Interestingly, China has once again entered the top 10 of Chainalysis Global Crypto Adoption Index report for 2022 after slipping to 13th position in the 2021 report. This performance despite China’s ban on cryptos meant the ban was ineffective. What’s more, it could also mean that the ban was loosely enforced, the report said.