{"id":312107,"date":"2021-07-30T15:34:00","date_gmt":"2021-07-30T12:34:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/a-trade-war-misstep-china-is-vacating-crypto-battlefield-to-us-banks\/"},"modified":"2021-07-30T15:34:00","modified_gmt":"2021-07-30T12:34:00","slug":"a-trade-war-misstep-china-is-vacating-crypto-battlefield-to-us-banks","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/a-trade-war-misstep-china-is-vacating-crypto-battlefield-to-us-banks\/","title":{"rendered":"# A trade war misstep? China is vacating crypto battlefield to US banks"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a4020f582ee6\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a4020f582ee6\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/a-trade-war-misstep-china-is-vacating-crypto-battlefield-to-us-banks\/#Has_China_made_an_error_of_judgement\" >Has China made an error of judgement?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/a-trade-war-misstep-china-is-vacating-crypto-battlefield-to-us-banks\/#Blockchain_but_not_crypto\" >Blockchain, but not crypto<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># A trade war misstep? China is vacating crypto battlefield to US banks <\/strong>&#8221;<br \/>\n<img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDcvMTdlY2JkNmItOTdiZi00MDUxLWEyODktMjc4YTc4NTg2NTQ1LmpwZw==.jpg\" \/><\/p>\n<div class=\"post-content\" data-v-128018ef>At the same time that China has declared war on cryptocurrencies, giant American banks <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ear to be embracing crypto \u2014 evident the final week of July with the <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">news<\/a> that crypto firm Lukka will provide State Street Bank\u2019s private fund\u2019s clients with digital and crypto asset fund administration services. This follows forays into the crypto space from the likes of BNY Mellon, JPMorgan, Citigroup and Goldman Sachs among traditional bank heavyweights.<\/p>\n<p>Is it too early to speak of trend and counter-trend? And if a trade war has broken out between the United States and China, as many believe, why is China turning its back on cryptocurrencies while some of the West\u2019s largest financial institutions, long wary of crypto, appear to see fresh value in blockchain-based digital currencies? <\/p>\n<p>\u201cYes, U.S. banks are firmly embracing Bitcoin as an investment tool,\u201d Nik Bhatia, author of the book <em>Layered Money: From Gold and Dollars to Bitcoin and Central Bank Digital Currencies<\/em> and adjunct professor of finance and business economics at the University of Southern California, told Cointelegraph, adding, \u201cJPMorgan and Goldman, for example, have greenlit Bitcoin investment products such as GBTC (Grayscale) for their clients.\u201d<\/p>\n<p>\u201cWe can see that banks and other financial institutions, such as JPMorgan and Citi, are starting to realize that blockchain <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">technology<\/a> is not just a passing trend,\u201d Bobby Ong, co-founder and chief operating officer of CoinGecko, told Cointelegraph. He added that \u201cas such, they are beginning to explore ways for them to offer cryptocurrency products to their clients.\u201d<\/p>\n<p>But what\u2019s with China? Since the beginning of summer, it has taken steps to curb \u2014 if not outright ban \u2014 cryptocurrency mining and trading. Do China\u2019s financial guardians know something that U.S. bank leaders don\u2019t?<\/p>\n<p>\u201cChina doesn\u2019t like crypto. It\u2019s not a sovereign currency, and it\u2019s beyond the Chinese government\u2019s control,\u201d Raymond Yeung, author of <em>China\u2019s Trump Card: Cryptocurrency and its <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/game\/\" data-internallinksmanager029f6b8e52c=\"7\" title=\"Game\" target=\"_blank\" rel=\"noopener\">Game<\/a>-Changing Role in Sino-US Trade<\/em>, told Cointelegraph, adding, \u201cEven if it\u2019s mined in China, it\u2019s still not administered by them \u2014 it\u2019s bypassing the PBoC (People\u2019s Bank of China). That\u2019s not acceptable.\u201d<\/p>\n<p>\u201cChina is a state that wants to keep everything under its control,\u201d agreed Ong, adding, \u201cThis can be seen from the recent crackdown on tech firms and even private education firms.\u201d Bitcoin\u2019s decentralized structure gives Chinese authorities fits, he suggested, and they would much prefer to create something that they can manage, like their digital yuan, which is in the process of being rolled out.<\/p>\n<p>It doesn\u2019t help that Bitcoin (BTC) mining uses so much energy and contributes to global warming, either, Yeung further explained. China has pledged to achieve carbon neutrality before 2060, and its \u201cemissions target is real.\u201d The government is already imposing emissions restrictions on the country\u2019s steel industry, and it just introduced a national emissions trading scheme. Bhatia added, \u201cChina does not want Bitcoin miners hogging their [energy] grid.\u201d <\/p>\n<h2><span class=\"ez-toc-section\" id=\"Has_China_made_an_error_of_judgement\"><\/span>Has China made an error of judgement?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>If a trade war is indeed underway between the U.S. and China, hasn\u2019t China miscalculated, though, by shutting down BTC mining operations, especially since North American miners are only too happy to take over China\u2019s role as the world\u2019s crypto mining center?<\/p>\n<p>\u201cIt might very well be a huge blunder, as hash rate that comes offline is very hard to get back,\u201d Bhatia said, adding, \u201cThat hash power has likely left China forever.\u201d<\/p>\n<p>\u201cI think it\u2019s difficult to say what China\u2019s goals are in this particular situation,\u201d commented Ong. He added, \u201cThey are aggressively trying to introduce the digital yuan as the de facto currency in the country and as a proxy to reduce the world\u2019s reliance on the U.S. dollar.\u201d As a result, when it comes to the core objective, this may not be a bad move: \u201cIt is in line with their goals of pushing for a centralized currency that is completely traceable by the government.\u201d<\/p>\n<p>There may be some nuances with regard to Bitcoin mining, too. The People\u2019s Republic of China could be using the mining crackdown to drive down the price of Bitcoin so the state can purchase <em>more <\/em>BTC at a cheaper price, Bhatia suggested, further explaining to Cointelegraph: <\/p>\n<blockquote><p>\u201cThey might not care about mining rewards anymore. They could be trying to acquire billions worth of Bitcoin and using the mining ban as misdirection. They could also be using the coal-mining ban as proof that China is serious about climate change in order to receive a more favorable standing on the global scene.\u201d<\/p><\/blockquote>\n<p>Others agreed that China might have a hidden agenda. The \u201ccrackdown on Chinese miners might mean that they are offloading coin into a thin market and taking us lower,\u201d <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.scotsman.com\/lifestyle\/money\/bitcoin-price-why-is-bitcoin-going-down-is-amazon-going-to-accept-cryptocurrencies-like-bitcoin-ethereum-and-ripple-3281505\">according<\/a> to Ben Sebley, chief growth officer of crypto firm BCB Group. <\/p>\n<h2><span class=\"ez-toc-section\" id=\"Blockchain_but_not_crypto\"><\/span>Blockchain, but not crypto<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Yeung, on the other hand, believes that China is serious about washing its hands of Bitcoin and other cryptocurrencies, but that doesn\u2019t mean it is necessarily forsaking crypto\u2019s underlying blockchain technology.<\/p>\n<p>\u201cThe government is willing to sacrifice BTC or Ether,\u201d Yeung told Cointelegraph, \u201cbut they don\u2019t want to sacrifice blockchain technology.\u201d There is still a lot going on in China in terms of blockchain technology development. \u201cThe government treasures the technology, but not crypto itself.\u201d <\/p>\n<p>Moreover, as the government has stated, \u201ccrypto is a source of financial risk,\u201d said Yeung, adding further, \u201cThey want to control crypto, but they can\u2019t. But they can still embrace blockchain technology, which they believe will improve productivity and spur economic growth.\u201d <\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>Death knell for Chinese crypto miners? Rigs on the move after gov\u2019t crackdown<\/em><\/strong><\/p>\n<p>Meanwhile, U.S. banks are acting like crypto\u2019s summer swoon never happened. \u201cThe growth in popularity of digital assets is showing no signs of a slowdown,\u201d said Nadine Chakar, head of State Street Digital, adding that State Street \u201cis committed to continuing to build out the necessary infrastructure to further develop our digital assets servicing models.\u201d <\/p>\n<p>\u201cThere is growing acceptance of Bitcoin\u2019s role in being a hedge on the current fear of currency debasement,\u201d Ong told Cointelegraph. \u201cAfter the announcement of an unexpected hike in the inflation rate\u201d \u2014 U.S. inflation <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.wsj.com\/articles\/us-inflation-consumer-price-index-june-2021-11626125947\">skied<\/a> 5.4% in June, the fastest rate in 13 years \u2014 \u201cmany people are considering alternative ways to preserve their wealth, and Bitcoin is starting to become a viable alternative.\u201d Banks are in the business of offering financial services, and as the demand to hold cryptocurrencies rises, it is not surprising that they are eager to enter the industry, he added.<\/p>\n<p>U.S. banks may also have an eye on future customers. \u201cWith an influx of younger investors entering the market, they are more likely to invest in riskier and diverse asset classes,\u201d said Ong, adding:<\/p>\n<blockquote><p>\u201cDisinterest in slow-moving assets, as well as the particular rise of \u2018meme stocks,\u2019 has definitely given the U.S. banks some ideas on how to capitalize on this shift in investing methodologies.\u201d<\/p><\/blockquote>\n<p>The fact that Bitcoin continues to avoid any scrutiny as a security or as an investment product that requires additional oversight may also factor in the U.S. banks\u2019 calculus. \u201cIt\u2019s a commodity and is able to avoid the SEC [regulation], which is essential,\u201d said Bhatia.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>China\u2019s crypto industry is gone? Beijing\u2019s crackdown keeps sending shockwaves<\/em><\/strong><\/p>\n<p>The U.S.\u2019s and China\u2019s approaches to regulation are philosophically different, summarized Yeung. China\u2019s government basically says, <em>You need my approval for anything<\/em>, while the U.S. says, <em>If you do anything that hurts me, I will ban you<\/em>. U.S. firms have more wiggle room, though. If the U.S. courts declare that BTC is a commodity, for instance, then regulators can\u2019t ban it. <\/p>\n<p>Meanwhile, if and when a younger generation turns to professional money managers, it will probably expect at least some exposure to crypto assets \u2014 which means Western banks could be entrenched in the crypto space for years to come. <\/p>\n<p><template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more News articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/a-trade-war-misstep-china-is-vacating-crypto-battlefield-to-us-banks\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# A trade war misstep? China is vacating crypto battlefield to US banks &#8221; At the same time that China has declared war on cryptocurrencies, giant American banks appear to be embracing crypto \u2014 evident the final week of July with the news that crypto firm Lukka will provide State Street Bank\u2019s private fund\u2019s clients&#8230;<\/p>\n","protected":false},"author":1,"featured_media":312108,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDcvMTdlY2JkNmItOTdiZi00MDUxLWEyODktMjc4YTc4NTg2NTQ1LmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74862,4973,70934,67874],"class_list":["post-312107","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-bitcoin","tag-china","tag-regulation","tag-united-states"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/312107","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=312107"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/312107\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/312108"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=312107"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=312107"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=312107"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}