China could become a major driver of the next crypto market cycle if it finds a way to reopen access to digital assets. Solana Company CEO Joseph Chee says Beijing is using Hong Kong to test crypto regulations.
Meanwhile, China’s reported Bitcoin holdings and mining activity show why any policy shift could matter to the global market.
China Uses Hong Kong to Test Crypto Rules
In a recent interview, Joseph Chee, CEO of Solana Company, said that China cannot afford to ignore blockchain technology despite its restrictions on cryptocurrency trading.
“They are using Hong Kong as the region to test how the technology will be implemented and are going to find ways to manage it.”
Beijing continues to use Hong Kong as a testing ground for Web3 development. Hong Kong is approving regulated spot ETFs, tightening audit rules for virtual asset service providers (VASPs), and developing stablecoins such as HSBC’s RedCoin.
This approach could help mainland China study how crypto markets operate under tighter rules before deciding whether to expand access.
Chee believes that if China allows more crypto trading and blockchain use, the impact could be significant.
“I think the crypto is going to go through another super cycle.”
Why China’s Return Could Matter for Crypto
Chee pointed to Asia’s large population and its early role in crypto adoption. He said restrictions in China slowed that growth, while the U.S. market gained a larger role.
Despite banning crypto trading in 2021, China holds an estimated 190,000 in government-linked wallets, worth around $15.7 billion. Although the government does not officially buy Bitcoin as a strategic reserve, it remains one of the world’s largest government-linked Bitcoin holders.
China also remains connected to Bitcoin mining. Estimates suggest China-linked miners control around 14% to 20% of the global Bitcoin mining power.
Therefore, a reopening could bring Chinese traders and companies back into the market.
“Chee believes China will eventually find a way to manage cryptocurrencies.”
China Builds Blockchain Infrastructure Beyond Crypto
China is also developing blockchain technology for uses beyond token trading. According to Xinhua, a 19-measure policy aims to build nationwide blockchain and computing infrastructure.
The plan focuses on bringing blockchain into manufacturing, banking, and data sharing, while improving data ownership rules and cross-border data flows.
This suggests Beijing is continuing to explore blockchain applications even as access to cryptocurrencies remains restricted.