In an interview with the South China Morning Post, Xiao Feng emphasized that Washington’s clear commitment to promoting the cryptocurrency industry could lead Beijing to re-evaluate its approach to the crypto business.

Trump attracted attention during his election campaign by promising to make the United States the global leader in crypto. Specifically, he pledged to create the “crypto capital of the planet” and eliminate anti-crypto regulatory barriers.

Xiao Feng thinks such strong commitments could be a catalyst for China to reconsider its current hardline stance towards cryptocurrencies. According to Xiao, a clear US policy of support for the crypto sector could accelerate the pace of China developing its own digital economy.

However, China’s approach to cryptocurrencies has been quite strict so far. Crypto trading, mining activities and initial coin offerings (ICO) are prohibited in the country. The Chinese government continues to view cryptocurrencies as a threat to financial stability and a source of illegal activities.

In particular, the basis of these bans lies in the aim of maintaining capital controls and maintaining the control of the central authority. Although China has cracked down on cryptocurrencies, it continues to show great interest in blockchain technology and centralized digital currencies (CBDC).

Trump’s pro-crypto stance has several geopolitical factors that could force China to reevaluate its policies.

In particular, US sanctions against Russia invading Ukraine and changes in the global financial system may create an opportunity for China to strengthen its digital economy.

Xiao suggests that such international pressure could cause Beijing to soften its strict policy towards cryptocurrencies. According to him, China may focus more on crypto technologies to avoid falling behind in global economic competition.

However, there is no concrete sign yet that Beijing will take steps in this direction. China is focused on developing and popularizing its state-backed digital currency, e-CNY (digital yuan).

Recently, the People’s Bank of China (PBOC) introduced a new digital payment card for e-CNY use. This card can be used like traditional debit cards, but offers additional features such as dynamic QR codes and real-time balance updates.

This shows that China maintains its centralized control policy towards digital currencies and maintains its cautious stance towards cryptocurrencies.

On the other hand, prominent figures in the crypto world, such as Vitalik Buterin, argue that the adoption of decentralized finance and cryptocurrencies is critical to moving beyond state-controlled digital currencies. However, China aims to gain full control over the financial system with its own digital yuan project.

It is still unclear what impact Trump’s crypto-friendly policies will have on China. However, according to Xiao Feng, US support for cryptocurrencies and leadership efforts in this field could be a pressure factor for China to re-evaluate its digital asset strategy.

China may be forced to review its strategies in the fields of blockchain and digital economy to avoid falling behind in global competition. However, it does not seem likely in the short term that Beijing, which aims to maintain control of the state, will change its current strict stance towards cryptocurrencies.