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Could China’s Hainan Island Become a Crypto Haven?

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China continues to have a stern relationship with decentralized cryptocurrencies. It set out to obliterate their operation with a number of key bans, but then went on to bolster blockchain. This bolstering of the technology has again taken flight, but the chance of cryptocurrencies reemerging in the People’s Republic was quickly shut down.

However, the steps that China have recently taken to reaffirm their commitment to blockchain could be creating a new niche for decentralized cryptocurrencies, but under the control of the government in some sense.  

While China was chasing exchanges away from its shores a few years ago, it is getting back in conversation with some recently as it looks to boost blockchain technology. Additionally, China has also set up a Free Trade Zone on an island off the mainland, Hainan, which could be the in crypto is looking for. 

Recently, in the news, it was reported that Hainan’s dedicated economic pilot zone has pledged to boost the role blockchain tech plays in the local economy with a fund worth 1 billion yuan ($142 million). 

According to local media, the Hainan Free TradeZone is aiming to “support the blockchain industry through talent cultivation, technological application, social investment, and other aspects.”

Part of the funding, interestingly, has come from OK Group, the parent company of cryptocurrency exchange OKCoin – as much as $140 million. More so, it was also recently reported that Huobi Global, has been chosen to be a leading member of a national network launched by the Chinese government in their attempt to establish blockchain as a service. 

In fact, it is the appearance of these two cryptocurrency exchange players helping the Chinese government that has sparked rumors that China may well be mulling over a play to try and allow crypto, but control it, under its borders. 

OKCoin’s founder, Star Xu, appeared on Chinese CCTV1 this week discussing the Hainan Free Trade Zone, which saw the CEO of Block Journal, state rumors were that China might be taking a step towards the legalization of cryptocurrency trading and regulation.

It is his opinion that Huobi and OKEx may be the first in line to be granted institutionalized permission to operate as exchanges. More so, there are additional rumors that other businesses dealing in crypto may be squeezed out. 

If this is the case, then it could be understood that China is trying only to allow cryptocurrency businesses, it has an understanding with to operate in order to maintain control.

Darryn Pollock
Darryn has been interested in the blockchain and cryptocurrency space since he heard about Bitcoin in 2015. He then decided to use his journalism degree to report on this fascinating fintech space in 2016, and has not looked back since.

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