According to Seamus Donoghue, VP of Strategic Alliances at METACO, China’s approach to crypto regulation will not have a significant impact on the broader digital assets market.
Donoghue emphasized that China’s latest move against the crypto industry does not necessarily imply that holding positions in crypto assets will be prohibited.
In an interview with ULTCOIN365, he revealed that, while China’s approach “may have a good deal of success,” it is “a little bit of a whack a mole.”
China is no longer as influential in terms of cryptocurrency adoption as it once was.
Mr. Seamus went on to say that China will become less relevant as a result of Western adoption trends, such as banks and institutions rapidly developing blockchain capabilities. Donoghue claims that:
“China’s will become less relevant… as the trend of Western adoption – with all the banks and other institutions building blockchain capabilities – accelerates dramatically and rapidly.”
Amid fears of a crypto investor exodus from China, he acknowledged that the country’s impact on the crypto markets in terms of adoption is no longer as significant as it once was.
Donoghue also stated that China’s stance on cryptocurrency is intended to benefit the country’s upcoming launch of its own digital currency.
“China has been testing and is about to launch their own digital currency,” Donoghue said. “That could be one of the reasons they are focusing on reducing the potential penetration of virtual currencies.”
The remark came after the People’s Bank of China (PBOC) published a Q&A on its website describing services that offer trading, order matching, token issuance, and derivatives for cryptocurrencies as illegal and declaring overseas crypto exchanges that offer services in the country as illegal.
Cryptocurrency prices plummeted as a result of the announcement. According to CoinMetrics, the price of the benchmark cryptocurrency Bitcoin (BTC) fell 5% to $42,496.12, while Ethereum (ETH), the second-largest digital coin by market cap, fell 7% to $2,921.53.
According to Chainalysis data, China ranked fourth in the global adoption index in 2021, with the United States ranking sixth; however, China has dropped to number 13 this year, with the United States now ranking eighth.