In a new interview on CNBC, Jeremy Allaire, co-founder and CEO of Circle, tells host Andrew Ross Sorkin why developments in China indicate that the country’s hardline anti-crypto stance is “softening.”
“We have been seeing, from my vantage point, a softening in the Chinese stance towards crypto. Recently, a major Chinese court defended that Bitcoin is in fact legal property in China, which was significant.
We’ve seen one of the very largest commercial banks, Bank of China, start to do proactive information marketing about the benefits of Bitcoin, the risks of Bitcoin, but more broadly its role in the world.”
The Chinese government banned initial coin offerings and most forms of Bitcoin trading in 2017. It has also discouraged Bitcoin mining, driving many mining operations out of business.
However, a June report from Xinhua News Agency, China’s state-run press agency, stated that Bitcoin displays the attributes of a “safe-haven asset” – signifying a potential change in the government’s outlook. Likewise, the Bank of China issued an extensive infographic last month touting the benefits of Bitcoin as a new asset with a limited supply. The marketing material also outlines for beginners how the payment network operates and who powers it.
Allaire notes that there is significant Chinese participation in the Bitcoin market through offshore platforms in jurisdictions such as Singapore, and he describes a “macro correlation” between recent US-China economic tensions and the increasing price of BTC.
“I think the broader theme of Bitcoin specifically, crypto more broadly, participating in these global macro forces is becoming more and more clear. Rising nationalism, rising amounts of currency conflict trade wars – these all are supportive of a non-sovereign, highly secure digital store of value and that’s very clearly been the fundamental thesis for Bitcoin and it continues to play out.”
However, in a series of tweets, Primitive Capital founding partner Dovey Wan debunks the narrative.
“‘Chinese buying up Bitcoin’ is a VERY dubious narrative IMO 1. Bitcoin is trading at a negative premium in Chinese centric exchanges like Huobi and Okex 2. RMB denominated OTC price is now at 1% premium, within its normal range since the bull.
I personally think the overall global financial uncertainty does help push up the market, but capital might come from the non-Chinese side more than the Chinese side. Gold, on the other hand, saw a real spike in volume and prices from the CNY denominated trading pair.
if they really want to hedge global financial uncertainty, especially local currency devaluation, Tether is the go-to place… instead of Bitcoin (sorry to let you guys down). BTC is more a long term hedge by some high net worth ppl. However, Tether is now at negative premium too.
But we anyway want a sound narrative to moon Bitcoin. So let it be, I totally buy into this.”