China’s position on cryptocurrency remains consistent despite developments in Hong Kong, according to an executive.

While Hong Kong is making steady strides in cryptocurrency adoption, mainland China has not altered its anti-crypto position regarding local regulations.

Several state-affiliated banks in China have increasingly begun to open bank accounts for crypto clients in Hong Kong. CPIC Investment Management — a firm supported by the Chinese government and regulated as a Hong Kong entity — even introduced two cryptocurrency funds in April.

These developments do not indicate that China has relaxed or will relax its regulatory stance on Bitcoin (BTC) in the near future, according to CPIC Investment Management CEO Chenggang Zhou.

“The Hong Kong government is making significant efforts to promote Web3 and crypto, but this does not suggest any alterations in the regulatory framework of mainland China or the Chinese government’s perspective on crypto,” Zhou stated in an interview with Cointelegraph on May 5.

Zhou highlighted that despite the backing from the Chinese government, CPIC Investment Management functions as a Hong Kong entity regulated by the Securities and Futures Commission.

“Hong Kong regulations permit us to invest in various markets, asset classes, or products such as cryptocurrencies, so we are not violating any regulations or laws,” the CEO remarked. He further added:

“We engaged in crypto because Hong Kong regulations allow us to do so. However, this is not an indication of the Chinese government’s stance or policy, nor a change in policy.”

China has upheld its anti-crypto position for an extended period, even prior to the complete ban on crypto in September 2021, Zhou pointed out. He expressed that he does not foresee any changes in the local government’s crypto policies in the near future.

The CEO’s perspective is shared by others who believe that China will continue to maintain an anti-crypto stance while attempting to bolster Chinese bank deposits through crypto accounts.

“Considering that the Chinese government is imposing strict regulations on the financial sector, it is difficult to envision China easing its control over the capacity of Chinese nationals to utilize crypto,” remarked David Lesperance, founder of Lesperance & Associates, in a conversation with Cointelegraph.

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Lesperance noted that China aims to enhance its foreign currency deposits, whether through fiat to acquire crypto or crypto itself. “They are separating the markets to exclude domestic Chinese customers while attracting foreign clients,” he observed.

The attorney also pointed out that the crypto market in mainland China is “still effectively shut down.” This raises concerns about enforcement regarding Chinese clients potentially using Hong Kong exchanges to withdraw funds from China. “Certainly, the authorities will attempt to prevent this leakage,” Lesperance remarked.

CPIC’s Zhou also indicated that crypto exchanges in Hong Kong enforce strict Know Your Customer policies, which are designed to limit mainland Chinese investors on their platforms.

“I do not anticipate any licensed crypto exchanges in Hong Kong accepting onshore mainland citizens for trading on their platforms,” Zhou asserted.

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