China is stepping up its push for a digital yuan, or central bank digital currency (CBDC), to reduce dependence on the dollar. So while the US ramps up its stablecoins, the Chinese government is looking to Hong Kong as a testbed. The strategy signals a shift in the company’s strict digital asset policy.
This information comes from analysis performed by Arkham Intelligence. The company published a report detailing recent moves by China to ban its institutions and payment methods from operating in cryptocurrencies in 2021, as reported by CriptoNoticias at the time.
China experienced mass exodus as it gave up its advantages in mining and trading. Large companies like Huobi and Binance have moved overseas. Nevertheless, subtle changes appear. Hong Kong positions itself as a regulatory center for digital assets with an autonomous legal framework. Arkam analysts believe this model is the future of the Asian giant.
Due to this ban, institutions including banks and online payment channels must not provide cryptocurrency-related services to their customers. The country has also curbed the dominance of large companies such as Huobi and Binance in bitcoin mining and digital asset exchanges. they moved abroad.
China became a mining superpower, controlling from 60% to up to 75% of the Bitcoin hashrate from 2017 until it decided to limit digital mining and cede the throne to the United States. But now the country is sending the following signals: will adopt a change of positionas seen by the Arkham team.
China between cryptocurrency control and global influence
Although prohibited in mainland China, Hong Kong encourages managed innovation. In August 202On the 5th, the Hong Kong Monetary Authority (HKMA) will implement the Stablecoin Ordinance. This established a license for broadcasting stations and attracted significant institutional interest. For this reason, many analysts classify Hong Kong as an important “regulatory sandbox.” The Chinese government is monitoring the risks and benefits of this “digital laboratory.”
From this carefully managed ‘digital laboratory’, Beijing Carefully monitor the risks and benefits of digital asset innovation. As the report points out, this strategic approach allows China to observe the development of crypto assets without changing the strict ban on the continent.
At the same pace, the Chinese government is promoting the digital yuan as a major financial leverage. However, we recognize that Bitcoin and cryptocurrencies are playing an increasing role in the world. The balance between control and opportunity is therefore likely to shape the country’s future position on digital assets.
“While the Chinese government continues to focus on the digital renminbi as its primary vehicle for financial innovation and financial influence, the creation of a regulated stablecoin ecosystem in Hong Kong shows that it recognizes the growing role of cryptocurrencies in global finance,” Arkham said in the report.
Analysts added that for crypto investors and users, Hong Kong has emerged as a leading portal into the region as China’s ban continues. The real verdict will come over time, when the balance between state control and economic ambition tips towards a greater thaw. In 2025, China is not only competing, but also redefining the game.