Do you remember the time when China was at the forefront of the Bitcoin mining space? Things went sideways when the Chinese government imposed restrictions on crypto to protect its fiat currency from devaluation, though. As of January 2024, the regulators keep their blanket ban on all crypto transitions and mining. Do Chinese cryptos still thrive, then?
The answer is yes, as shown by the Chainalysis Global Crypto Adoption Index 2023. China ranks at the 11th spot in terms of crypto adoption around the world, which proves a steadfast crypto user base in the country despite the many restrictions. Part of the reason for this would be Hong Kong legalizing crypto; the bullish development in 2023 led to increased demand for Chinese crypto coins among both native and international investors.
In this article, we explore China’s somewhat tumultuous history with crypto, and the top 5 Chinese cryptos you should be watching out for in the wake of Hong Kong’s bold approach to regulate crypto.
China and crypto: what went right and what did not?
China was one of the first countries to take a liking to Bitcoin. In fact, the first Chinese crypto currency exchange came up as early as 2011, named BTC China. Early years of BTC was also around the time Baidu began accepting the crypto as payment for services related to website security. China crypto hype also involved setting up large Bitcoin mining facilities with cheaper electricity.
In 2014, there was Bimain in the Chinese cryptos scene, which was one of the very first crypto mining equipment manufacturers, as well as a mining pool operator. Keep in mind that since 2013, the China crypto space has gone through interspersed bans (more on that to come), and yet throughout it all, the country’s digital currency enthusiasts kept thriving.
Notably, China became the world’s biggest crypto mining hub before the bans imposed on crypto mining and trading, making up about 65% to 75% of the total hash rate or processing power of the Bitcoin blockchain. What’s more, even all the bans on Chinese cryptos could not snuff out the country’s mining activities altogether: there have emerged underground mining operations in China- several in number. These miners work around the bans, and by September 2021, China was back to the crypto mining scene by claiming over 22% of the entire BTC mining market.
Which bans did China crypto space bring?
In chronological order, these are the bans Chinese cryptos and the overall crypto space in the country have to put up with:
- In 2013, China crypto banned banks from digital currency transactions. On December 5, 2013, the People’s Bank of China (PBoC), the Ministry of Industry and Information, and other financial institutions issued a notice to forbid banks from handling any Bitcoin-related transactions. This was done because Bitcoin is not backed by any national/central authority figure, and the regulatory bodies deems it as something that could back illegal activities.
- Then in early 2017, Chinese cryptos space saw a ban on crypto ICOs or initial coin offerings. This was done to give a lift to a sinking yuan, and also to block funds flowing out of the country through illegal means. The central bank probed into crypto exchange activities, especially regarding their stances on forex management and anti-money laundering. The PBoC then found ICOs to be an illegal mechanism for raising funds, and all Chinese financial institutions were now banned from providing services related to token-based fundraising.
- A leaked document from later in 2017 had regulators urging Chinese crypto currency exchanges to slow down operations and bring in procedures to allow users to withdraw their funds. In the wake of this development, many prominent China crypto exchanges left the country or packed up their services. However, Chinese crypto coins traders started using international exchanges or decentralized, peer-to-peer platforms to get around this situation.
- In 2019, Bitcoin mining was hit. China’s NDRC or National Development and Reform Commission pointed Bitcoin mining out as an ‘undesirable’ industry as part of its preliminary list of sectors to be encouraged, restricted, or phased out by the local governments. The reason was Bitcoin’s high energy consumption, making mining an environmentally harmful procedure. The NDRC later removed Bitcoin mining as harmful in its final draft, but the event sparked significant unease across the global crypto space.
- In 2020, the Chinese government extended its control over crypto activities in the country, with the PBoC going so far as expressing its plan to block more than 100 international platforms offering crypto exchange services in the country.
- In 2021, the State Council reinforced past policies by initiating complete restriction of crypto mining and trading in China. After this, provincial governments took strict measures to completely shut down crypto mining across their respective regions. The Bitcoin mining crackdown significantly shook up the global crypto space.
- To top it all off, China crypto regulators banned digital assets trading in September 2021, once and for all.
As of the beginning of 2024, Chinese crypto currency trading remains illegal. However, to fill the void left by China’s thriving cryptocurrency sector, China is now backing the digital yuan at full steam, as a bridge between fiat and crypto.
Hong Kong crypto
As opposed to China crypto, the crypto Hong Kong scene is at the forefront when it comes to regulating cryptocurrencies in a way to serve both users and developers. The Securities & Futures Commission of Hong Kong allows retail investors to trade in, buy, and sell crypto, which has in turn drawn attention to some China-related cryptocurrencies and tokens. In this post, we discover the top five Chinese crypto coins to have come into limelight because of Hong Kong’s pro-crypto policies.
Chinese cryptos to watch out for
So, which Chinese cryptocurrencies to look for now that Hong Kong crypto is going strong? In no particular order, here are our top 5:
- Conflux (CFX)
The Conflux blockchain project is aimed to solve existing industry issues for decentralized app developers and users. It can collaborate with other blockchains with the help of ShuttleFlow, its cross-chain protocol. In December 2023, Conflux had shown a growth of 17%. The Chinese-origin crypto is expected to hold on to its growth trend in 2024.
As of January 10, 2024, Conflux is trading at $0.1726, up by 619.20% in the past year.
- VeChain (VET)
The VeChain blockchain project was founded with the goal of disrupting conventional business models; it has left a notable mark in the supply chain industry already. The project started its journey as a subsidiary of the Chinese blockchain company Bitse. Even though the project previously had the VEN token on the Ethereum blockchain, VeChain moved to its own blockchain in 2018 and rebranded with the ticker VET.
VET is priced at $0.03004 on January 10, 2024, with a 70.68% hike in the past year.
- Alchemy Pay (ACH)
Alchemy Pay’s target is to make Ethereum development easy. The payment solutions provider looks to connect fiat and crypto economies for a global user base of consumers, merchants, institutions, and developers. Through this platform, merchants can accept payment both online and offline in fiat and crypto. This enables easier access to DeFi and web3 with smoother user experience.
ACH is trading at $0.01815 as of January 10, 2024, up by 119.28% in the past year.
- Filecoin (FIL)
Filecoin has enjoyed significant popularity in the Chinese crypto space, with most miners being based in the country before the ban. Filecoin’s use case is a very practical one: allowing data storage the decentralized way. Where cloud storages like Cloudflare face the issue of centralization of power, Filecoin protects data integrity and keeps it from censorship while making it more accessible.
On January 10, 2024, FIL trades at $5.61, having gone up by 50.02% in the past year.
- Cortex (CTXC)
Headquartered in Beijing, China, this China crypto project provides support for AI models to be uploaded and executed on distributed networks. As you can see in the price chart, the end of 2023 has seen a significant rally in CTXC’s price, and the bullish sentiments are expected to be carried forward in 2024.
As of January 10, 2024, CTXC is priced at $0.3696, with an 88.87% growth in the past year.
Start crypto trading!
We hope this list of Chinese cryptocurrencies prove helpful as you bank on the Hong Kong crypto hype! And if you are looking for a good crypto exchange to trade Chinese cryptos, you can find FIL, CFX, and more listed on Millionero. Our platform can be the simplest, most user-friendly journey to crypto success for you, join us today!
Disclaimer: Cryptocurrencies are an inherently volatile asset class, and investments can carry substantial risks. This information is for educational purposes only and should not be construed as financial advice. Always do your own research and conduct due diligence before investing in crypto projects.