The establishment of a U.S. Strategic Bitcoin Reserve by the former administration may prompt China to reconsider its stringent approach to cryptocurrency, which could significantly enhance the global acceptance of Bitcoin, according to a research analysis released on Monday.
“China is the country to monitor closely in this context,” the report stated, emphasizing that any relaxation of crypto regulations by China could lead to a marked increase in worldwide adoption.
Last month, the former President instructed his team to create a Strategic Bitcoin Reserve aimed at safeguarding assets that have been confiscated by authorities.
The report highlighted that while the current policies of the Chinese government prohibit most cryptocurrency operations, including trading and mining, they do allow for the possession of digital assets.
Nevertheless, “regulators have permitted a growth of crypto-related activities in Hong Kong under the ‘one country, two systems’ principle,” the report noted.
In addition, local authorities appear to be reassessing how cryptocurrencies should be treated legally. A meeting of the Supreme Court and various judicial bodies in China took place in February to discuss the future legal treatment of digital assets, according to the report.
Read more: U.S. Strategic Bitcoin Reserve, Crypto Stockpile a ‘Pivotal Moment’ for Industry: KBW